I couldn’t have been the only one who, while reading David Carr’s New York Times piece on Facebook’s attempts to woo news publishers into hosting their content on its mobile platform, drew a parallel to Amazon’s relationship with book publishers. It’s easy to forget sometimes that Amazon, before it reached such a dominant position with the bookselling marketplace, was viewed by publishers in the 90s as an opportunity to expand their market beyond brick and mortar bookstores. They never considered the possibility that Amazon would one day drive those physical bookstores into the ground. For me, the most striking resemblance to the two relationships (Amazon vs book publishers and Facebook vs news outlets) came while reading this paragraph in Carr’s piece:
It is a measure of Facebook’s growing power in digital realms that when I called around about those rumors, no one wanted to talk. Well, let me revise that: Many wanted to talk, almost endlessly, about how terrible some of the possible changes would be for producers of original content, but not if I was going to indicate their place of employment … It’s not that Facebook has a reputation for extracting vengeance, so far as I know; it’s just that the company has become the No. 1 source of traffic for many digital publishers.
Sound familiar? This is the same mealy-mouthed not-for-attribution tactic that many book publishers employ when bashing Amazon because they don’t want to risk offending the golden goose. And to be sure, Facebook is becoming a larger and larger golden goose for publishers. Here’s a chart via Business Insider’s Lara O’Reilly showing traffic referrers to BuzzFeed properties over time:
And this chart, courtesy of GigaOm’s Carmel DeAmicis, shows that Facebook now accounts for up to 20 percent of referral traffic for many websites:
But while 20 percent is a hefty amount of traffic, that still leaves 80 percent from other sources. In fact, media watchers were posting very similar charts to show Google’s dominance just a few years ago, and now you’re seeing headlines that some publishers are paying less and less attention to SEO. A lot of people go to Facebook every day, but it’s not a single-destination property on the web. Companies still have email, Twitter, Pinterest, and even their homepages to continue marketing their content.
Amazon, on the other hand, has a true choke point. Not only does it have a database of millions of credit cards from its users, but consumers are primed to think of it when they’re looking to purchase a book online. When have you ever thought of visiting a book publisher’s website when seeking out a title? Do you even known who published your five most favorite books? Do you follow any book publishers on Facebook or Twitter? And when it comes to ebooks, Amazon has a 70 percent market share, giving it even more negotiating power to bend book publishers to its will.
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So does Facebook have any potential choke points for news companies that it can use to bend them to its will? Perhaps. Here are two of them:
The first is mobile. Unlike with the internet, which wasn’t taken seriously for several years as a potential moneymaker, both large corporations and entrepreneurs latched on to mobile’s importance pretty soon after the debut of the iPhone. No one took mobile more seriously than Facebook, which now has 654 million daily mobile users and generates 66 percent of its revenue from mobile advertising. It seems clear that banner advertising doesn’t work on tiny mobile screens, and Facebook is one of the few games in town that has nailed mobile advertising. News publishers, meanwhile, haven’t even effectively monetized desktop advertising very well. It’s all too easy to imagine a scenario in which Facebook begins luring publishers onto some kind of advertising network by promising generous revenue splits, and then, once it’s lulled them into a state of dependence, begins using that dependence to continue pursuing its own agenda.
The second choke point is the Facebook News Feed itself. Because it’s algorithm-based, it can incentivize different kinds of actions on Facebook. For instance, Facebook could start giving more preference to content uploaded natively to its platform and less preference to links to outside source, thereby rewarding news publishers that choose to host their content on Facebook. As Marcus Wohlsen at Wired posited:
Imagine a publisher posts a YouTube link to Facebook and gets a few “likes” and clicks. Then imagine that same publisher uploads a video to Facebook, and gets a lot more views and “likes.” Maybe it’s a fluke. But over time, a pattern emerges. The videos posted straight to Facebook get watched more. Soon enough, all their videos are going straight to Facebook. Perhaps over time, the process repeats itself for other kinds of content.
We don’t have to imagine it because we’ve already seen it happening. Facebook started showing favoritism to photos uploaded to its own platform over link-based posts years ago. That’s why you saw Facebook page owners start uploading photos and then posting a headline and bit.ly link to their content, so it could get more visibility. And with Facebook’s recent heavy push into video, we’ve seen the same thing with YouTube. As Todd Wasserman reported at Mashable, the share of YouTube posts on Facebook is declining while Facebook video posts are poised to overtake them in the near future. This is likely because Facebook page owners have noticed they see much more engagement when they upload directly to Facebook.
Facebook isn’t the only social network playing this game. LinkedIn, for instance, used to send truckloads of traffic to it news partners, but after LinkedIn opened up its blogging platform to the public, publishers suddenly saw way less traffic as LinkedIn began favoring its own natively-produced content. “It’s dried up to almost nothing,” a source told BuzzFeed’s Myles Tanzer.
Reading of all these instances of social networks shoring up their user bases to keep as many users on-platform as possible, I couldn’t help but think of the folklore myth of Lorelei. She’s a mermaid who sits atop a cliff and, like the sirens of The Odyssey, lures sailors with her song, causing them to crash into the cliff and hastening their deaths. When news publishers read that Facebook wants to lure them onto its platform, they likely recognized the cliff for what it was. The question now is whether they can resist its song.
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