Home » OPINION » Columns » TODD SMITH — Facebook offers news outlets millions for publishing rights

TODD SMITH — Facebook offers news outlets millions for publishing rights

TODD SMITH

Facebook is willing to shell out millions of dollars for the rights to publish its content in a news section that the company hopes to launch later this year, according to The Wall Street Journal.

Facebook officials recently told news executives they would be willing to pay as much as $3 million a year to license headlines and previews of articles from news outlets.

The outlets pitched by Facebook on its news tab include Walt Disney Co.’s ABC News, Wall Street Journal parent Dow Jones, The Washington Post and Bloomberg, according to the Journal.

This news comes in wake of Facebook’s growing criticism for its role in the news industry’s challenges by siphoning much of the ad revenue that used to go to news outlets. Combined, Facebook and Alphabet Inc.’s Google earned 60% of all digital advertising revenue in the U.S. last year, according to eMarketer.

The news deals between Facebook and media outlets would run for three years, according to The Journal. Facebook is planning to launch the section sometime this fall. There’s no word yet on whether any news outlets have formally agreed yet to license their content to Facebook.

Facebook has proposed giving news outlets control over how their content will appear in the news tab, according to The Journal. News outlets would be allowed to choose between hosting their stories directly on Facebook or including headlines and previews in the tab that would link readers to their own websites, in which case the news tab would be a generator of web traffic for news outlets in addition to a source of licensing revenue.

Google, one of Facebook’s biggest rivals, has been criticized for not compensating news organizations for the headlines and story previews surfaced by its search engine.

Facebook’s developing news tab is separate from “Today In,” a section on the platform that delivers users stories from news organizations in their area.

This is a different direction than the financing offered to Facebook for Instant Articles, another high-profile news feature. For that initiative, Facebook compensated news outlets by splitting ad revenue with them as opposed to paying them upfront.

Facebook pays licensing fees for other content, too. It pays upfront for the right to show videos in its Facebook Watch section, home to original shows and popular clips. It also previously paid publishers upfront to create content for the Facebook Live video feature.

Instagram as retailer?

Instagram is great for sharing photos, interacting with celebrities and discovering trendy looks – everything even Amazon has struggled to perfect. Fashion houses, retailers and big brands see an opportunity.

Until recently, brands have used Instagram mostly as an advertising tool to reach consumers. But Instagram has made a series of moves to become a shopping hub, forcing companies to adapt their digital strategies.

Although Instagram remains a very small player in retail, if the platform disrupts shopping one day, retailers who got blindsided by Amazon years ago are seeking ways to be ahead of the curve this time.

In March, Instagram introduced a new checkout option that allows customers to purchase products directly off a handful of companies’ pages within its app. Previously, shoppers had to leave Instagram when they found a product on the app and buy it off retailers’ websites. That was an irritation for customers, analysts say.

Instagram has also added tools that allow customers to shop items on its Stories and Explore pages. And shoppers can buy looks that Kylie Jenner, Kim Kardashian West and other celebrities wear on their Instagram feeds directly through their posts.

Instagram is a useful tool for shoppers to easily discover a curated mix of clothing from brands and celebrities, experts say. This type of hunt can often be frustrating for customers online. That’s because browsing to find clothing is challenging on Amazon or retailers’ websites and apps, where shoppers often have to scroll through dozens of pages and hundreds of products.

Instagram’s efforts to transform into a shopping hub have enticed some brands. These companies see an untapped market to sell their merchandise directly to their large Instagram followings. Companies like Adidas say they are taking advantage of the new tool by launching new sneakers and clothes on Instagram.

Shopping off Instagram could be a $10 billion market by 2021, according to Deutsche Bank, and the platform allows brands to woo shoppers beyond their own websites, brick-and-mortar stores and Amazon.

Instagram says that 80% of the app’s users follow a business. More than 130 million users every month tap Instagram posts to see shopping product tags.

More than 20 brands, including Nike, Adidas, Uniqlo, Warby Parker, Outdoor Voices, Prada, Dior and Kylie Cosmetics, are testing an updated checkout feature with Instagram. These companies hope the option will make it easier for customers to purchase through the site and boost their sales off the platform.

Companies such as Adidas and Burberry are also thought to be teaming up with Instagram to gain a larger stake in the future of shopping through social media.

Headliner Mic: New York Times stirs controversy

The Gray Lady is backtracking big time!

In wake of the heartless mass shootings in El Paso, Texas and Dayton, Ohio, President Trump addressed the nation. The New York Times, of course, covered that speech. Then five words stirred a controversy.

Trump Urges Unity Vs. Racism

That was the headline on the original Times story about the Trump speech. When FiveThirtyEight editor Nate Silver tweeted a photo of the front page, the backlash was swift and angry. Democratic presidential hopefuls Beto O’RourkeCory BookerKirsten Gillibrand and Bill de Blasio all took exception with the headline. So did many journalists — including CNN contributor Joan Walsh, who said she cancelled her subscription, and Soledad O’Brien, who called the headline “absurd.”

The firestorm was so strong that the Times did something papers normally don’t do: It changed the headline after the first edition. The new version read: “Assailing Hate But Not Guns.”

The Times issued a couple of statements about the original headline. One called it “bad” and another called it “flawed.” Times executive editor Dean Baquet told The Daily Beast, “It was written on deadline and when it was passed along for approval we all saw it was a bad headline and changed it pretty quickly.”

Was the headline bad? After all, Trump actually urged unity against racism when he said, “In one voice, our nation must condemn racism, bigotry and white supremacy.” You could argue that the headline is not, technically, wrong. Fox News’ Howard Kurtz, in fact, made that very point and said the Times “caved into” a “left-wing mob.”

While it’s easy to knock The Times’ headline, consider how incredibly challenging headline writing is. Take the Trump story. There are two mass shootings that killed 31 people in two cities. Trump then delivers a 10-minute speech about an epidemic that no one agrees on and no one can solve. And an editor on a tight deadline must sum all that up in five to seven words that demand just the right number of characters.

While the headline was misguided and perhaps wrong, mistakes happen in the buzz and whirr of daily news. To cancel a subscription for a headline that was quickly changed is silly.

Each week, The Spin Cycle will bestow a Golden Mic Award to the person, group or company in the court of public opinion that best exemplifies the tenets of solid PR, marketing and advertising – and those who don’t. Stay tuned – and step-up to the mic! And remember … Amplify Your Brand!

» TODD SMITH is co-founder, president and chief executive officer of Deane | Smith, a full-service branding, PR, marketing and advertising firm with offices in Jackson. The firm – based in Nashville, Tenn. – is also affiliated with Mad Genius. Contact him at todd@deanesmithpartners.com, follow him @spinsurgeon and like the ageny on Facebook at https://www.facebook.com/deanesmithpartners, and join us on LinkedIn  http://www.linkedin.com/company/deane-smith-&-partners.

BEFORE YOU GO…

… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About For the MBJ