Facebook Rejects Subsidizing Australian Publishers; Says News Value Insignificant

Minimizing the value of news content, Facebook says it has no plans to share additional ad revenue with Australian publishers.

“We… don’t view it as healthy or justifiable to require one or a few private companies to subsidize the news industry in unsustainable ways, or to be made accountable for the profitability of news organizations that have a presence in Australia,” the company writes in a new response to the Australian Competition and Consumer Commission.

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At the behest of Australia’s treasurer Josh Frydenberg, the ACCC last year created a proposed “mandatory code of conduct” with a new framework for the relationship between digital platforms and publishers.

The proposed code would require Facebook and Google to negotiate revenue-sharing arrangements with news publishers.

In its response, however, Facebook contends it already provides publishers with enormous value, while it receives relatively little in return.

“The available evidence to date does not necessarily indicate that the value exchange [between Facebook and publishers] favors Facebook,” the company asserts. Among other benefits, Facebook points out that its platform gives publishers free organic distribution, tools to help monetize their content, and the ability to build brand awareness and reader communities. From January through May, Facebook said its News Feed generated approximately 2.3 billion organic referrals to Australian news publisher domains, which it estimates to be worth approximately $134 million.

During the same period, Australia-based news publishers earned an additional $1.5 million from participating in Facebook’s In-Stream Video ad program, says Facebook, adding that the publishers also generated approximately 27 million organic views in News Feed on tagged branded content posts during this period.

Separately, Facebook is suggesting that news is of only marginal importance to its readers. “Notwithstanding the traffic we provide to news publishers, news content represents only a very small fraction of the content in the average Facebook users’ News Feed, because Facebook is primarily a service used to connect with family and friends,” asserts Facebook, which claims it discovered this after it began in early 2018 to prioritize content from friends and family over news in users’ News Feeds.

According to Facebook: “The past two years have seen an increase in people engaging on our services and increased revenues, suggesting both that news content is highly substitutable with other content for our users and that news does not drive significant long-term commercial value for our business.”

Although the response is addressed specifically to Australian officials, Facebook’s stance on the value of news content could have broader implications.

Following a prolonged testing phase, Facebook finally began offering its News service to all U.S. users this month. The tech giant has signed on about 200 news outlets, including The Wall Street Journal, BuzzFeed and USA Today. In exchange for their content, Facebook was reportedly offering publishers up to $3 million in annual licensing fees.

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