Facebook has just announced that it’s going to tap into a new revenue stream that of 'Paid News Subscription”. This was announced by Facebook just as the News Media Alliance was picking up some speed.
The News Media Alliance is a group of nearly 2000 national and local news publishers in the USA. It includes renowned names like The New York Times, The Washington Post and even The Wall Street Journal. The group filed a petition to get an antitrust exemption from the US Congress to negotiate a deal over the online advertising revenue share for themselves.
Mr. Campbell Brown, the head of Facebook’s news partnerships announced that Facebook will go ahead with appeasing the Alliance by rolling out a subscription based model for the news articles that it hosts on its platform. The trials for this subscription based model are to start from this year October. This decision was the outcome of discussions with many of the news publishers.
The subscription model to be introduced is that of a pay wall. It will work based on premium and metered plans.
The plan is to erect a pay wall that lets the users view a set number of articles after which they are asked to pay for accessing the remaining articles. In the case of Facebook, they have settled for a number 10, i.e., 10 free articles per publisher.
Facebook has promoted its requirement by stating that it would provide the user data to the publishers such that they can understand their audience better and thereby steer their articles in a similar manner to generate better readership. In this age of data analysis, this is the ace of hearts that Facebook holds.
Reason for Dissidence
The news publishers had believed that allowing sharing of news articles online via Facebook would help them garner a portion of revenue from the digital advertising market. Facebook is side stepping the news publishers by not directing them to the article through the publisher’s website thereby denying them potential advertisement revenue from the users, in a way. This is where the complication arises.
Paul Boyle, Vice president Public Relations of the News Media Alliance states that they are not looking to break up the duopoly that Facebook and Google have, but yearns to find a better-improved alternative to this present business model.
Tried & Tested
This particular pay wall model is not a new form of revenue generation. The likes of The Economist, The New York Times as well as The Wall Street Journal have been following a similar model on Facebook already, albeit with minor differences. For instance, The Economist allows only 3 free articles per week.
Behold the future
Newspaper advertising revenue has declined from $ 50 billion ten years ago to $ 16 billion in the last year. As per reports,
Facebook and Google control two-thirds of the digital advertising market. All we have to do is wait and watch how Facebook structures this new subscription model of theirs and the amount of added revenue that the news publishers start making.