Why Facebook shutting down news pages is a bad move

Until very recently Facebook has benefited from “news” being a massive driving force for them, especially for bringing a vast number of people back to the platform over other social media outlets. In the “attention economy”, Facebook is one of the top players and the Facebook news and article pages are another method for the social media giant to bring in the masses whilst trying to keep its billions of users for as long as they can.

So what’s happened with Facebook and Australia?

What we have learned from the news in Australia is that large platforms such as Facebook and Google will now need to consider paying for the content that is shared on their platform. The issue has arisen because the traditional news media channels have seen a drastic drop in readership both direct in print and in digital subscriptions. This is in part due to there being multiple ways of getting the news to readers so they no longer feel the need to go directly to the publishers. This has resulted in news publishers seeing a huge reduction in revenue that they receive from their ads as they have fewer users landing on their websites. 

Facebook’s revenue increase

Facebook, on the other hand, has seen its revenue double between 2017 to 2020 going from approximately $39B to $84B, and unsurprisingly this revenue is generated through its Facebook Ads channel. The argument is that Facebook is using their news pages to bring people onto their platform and spend more time on it, therefore, increasing Facebook’s usership statistics that they then base their advertising pricing on. News pages therefore undoubtedly help to increase the pricing of the ads and therefore revenue for Facebook. This has caused a massive stir amongst the media groups and caused them to join together and fight against Facebook’s “free” news. 

You will have seen this come to a head in Australia recently as media outlets take on Facebook directly. Large news agencies such as News Corp and Nine network are in talks with the government to try and help them get paid for the news that is shared on the Facebook platform. 

Google enters the news storm

The surprise has been that now two tech giants have reacted to the news – enter Google. Google, unlike Facebook, was thinking about banning the news pages on their platform but they decided against this move and have alternatively held discussions with the major news agencies to agree to payments for the news shared on its platform. Arguably, this is great for these large news agencies as they will see their revenue increase but there is no mention of the independent news agencies and platforms that do not have the bargaining power that the multi-billion dollar companies do. Unfortunately, what happens to these companies is something we will only find out once the new law comes into power.

Facebook blocks news

Facebook decided that midway through its negotiation with the Australian government, it would block all news media pages on its platform. As you are all very much aware, this move did not go down very well. This affected not only news agencies but also government pages, community service pages, and even some health advice pages. As for the timing, this couldn’t have been worse with the ongoing Covid epidemic as the health advice pages provide a much-needed and vital service. This can be said for many of the local community support pages that people use and rely on every day. The move from Facebook could lead to many of its users being alienated by them and in turn, forcing them to stop using the service.  

The News Media Bargaining Code

As you would expect from Facebook, a battle has now ensued with the Australian government and as to what the outcome will be, we still need to wait and see. When the News Media Bargaining Code comes into effect in 2021 all social media platforms will need to pay to allow content produced by news agencies. In a statement, Facebook has said that “only 4% of the content on its news feed is news” and that “the current value exchange (between itself and Australian news agencies) is in favour of the news agencies and it has actually driven 5.1billion referrals to Australian publishers”. 

The tech giant however gave no warning to the users in Australia that it will take down their pages which has resulted in many smaller businesses that rely on this platform to generate revenue to lose out and add to the struggle of the current economic situation. Many smaller businesses have protested the move as they don’t feel that they fit the criteria as a news agency, but for Facebook, it seems any person or organisation that creates content could be seen as a potential liability for repayments due to the nature of their work. 

What Facebook seems to have forgotten, however, is that this service is more important than we realise, given the massive distrust some of the public have about the news. Providing well investigated and researched news to the public is of massive importance to our society so this move by Facebook is only adding fuel to the fire by not rewarding this work.

What we can learn from Facebook vs. news outlets

If there is something we can learn from this saga, it’s that large tech giants that rely on ads as their primary source of revenue will fight tooth and nail to avoid paying for content that they feel is not shared by them but by their users. They would also probably underplay the importance of this content and the revenue it drives for them as otherwise, they would have to acknowledge the importance of this work to their service and thus admit that they are benefiting financially from someone else’s work. 

In the digital advertising industry that is estimated to be worth around $600B worldwide, Facebook and Google have a combined market share of around 60%. The only way for these two companies to maintain this is by providing new and trending content so more users can stay tuned to their platforms. It’s important for us to remember that both Facebook and Google play a massive part in the attention economy so their only priority is to keep the users on their platform for as long as they can and try to sell the ad spaces to businesses. 

What we can learn from this is that sometimes we need government interference to help regulate industries. The silver lining to this ongoing fiasco is that other governments around the world can start implementing the same rules so news like this could be more frequent in the years to come. This would mean that more news agencies will get money for their work and in turn, their journalists will be paid properly, and hopefully, this will lead to more content writer graduates following their passion to join the world of journalism.