Facebook increasingly seen as competitor to content companies

By September 20, 2011Content, Facebook, News

I have seen two comments in the last couple of days making the point that whilst content companies of all flavours are happy for the traffic they get from Facebook they are increasingly conscious that time spent on Facebook is time not spent on their own properties, and hence generating ad revenues for Facebook rather than the owner or publisher of the content.

The first was a comment on this blog from Nicholas Lovell:

TV companies are beginning to view Facebook as a competitor, not a partner. If a TV company builds a major brand (say Downton Abbey) that generates a lot of likes on Facebook, then advertisers can pay Facebook to advertise against that audience. The TV company invested in the IP, took the risk, but Facebook got the reward.

The second was a post this morning on Forbes:

Is Facebook a friend of news companies, or is it a rival? No matter how much success publishers have piggybacking off its traffic, they can’t escape the cruel math: The more of their time consumers spend on Facebook and other social networking hubs, the less they have left over for news sites.

This is in some ways a repeat of the argument Google had with the news industry which initially welcomed traffic from Google search, but later began to see Google as a threat, largely because people could read the headlines in Google’s search results and then had no need to go to the news site at all.

My feeling is that Google has effectively won that battle, mostly because news publishers can’t live without its traffic (would welcome thoughts here though).  I think the Facebook vs content industry showdown will play out differently because it is less of a zero sum game.  News and TV producers can improve their products by making them more thoroughly social whilst Facebook will improve its data assets (increasingly their key asset) if they do so.  The consumer experience can then take place either inside or outside of Facebook.  The big question will be the extent to which they share revenues.  Google refused to share, but Facebook is both asking more of its partners and getting more in return, so I think they will cut deals.

According to the Forbes article mentioned above on Tuesday the WSJ is launching a news product that lives entirely within Facebook which sounds very cool:

it’s … about reimagining newspaper reading as an inherently social experience. Users choose whose streams they want to follow — the official ones produced by the paper’s, and each other’s — and that determines what stories they see. The most-followed users can compare their rankings on a leaderboard and earn prizes — possibly including their own WSJ-style stipple portraits. “It’s really about the users being elevated to editors,” says Maya Baratz, the Journal’s head of new products.

And apparently it will look like this:

image

Enhanced by Zemanta
  • Gamifying the role of editor with leaderboards and prizes?

    I already do this with twitter (only without the gamification bits) – I read the stories curated by the people I follow on Twitter. The joy of that, for me, is that it’s content from more than one source. The WSJ is trying to do this with one source.

    I think that the facebook idea is interesting, the social idea is interesting. The idea of it coming from just one source is, well, less interesting

  • My initial reaction to this was ‘good point, variety of sources is part of the beauty of getting links from your friends’, but on reflection I think that is only half the story. The other half is thorough monitoring of a couple of comprehensive sources (for me Techcrunch, the FT, Venturebeat and a couple of other tech blogs) – for these sources a dedicated Facebook app might work. I can see that flicking through an FT app, a Techcrunch app and a couple of others where the best articles were surfaced for me might be quicker than using Taptu (or any other feedreader). The apps would have to be tablet based though.

  • Nic, I liked this in particular:

    The big question will be the extent to which they share revenues.  Google refused to share, but Facebook is both asking more of its partners and getting more in return, so I think they will cut deals.

    If you remember, a while ago (well, Nov. 2010 – I just dug out the email) I expressed the idea of “FbSense” as a way for sharing ad revenues on Facebook with the owner of a Page, or content in this case. One year on, do you think this may be a make or brake for FB and content companies?

  • Hi Fabio – I think you are on the money with FbSense – many people view it as inevitable and Facebook themselves are talking about it now, although they are saying they don’t have any immediate plans.
    I can’t remember what I said last year – is that consistent?

  • Hmmm, I like you too much to say you were not very consistent 🙂

    Let’s put things in perspective though. The gist of my post (http://www.fabiodebe.com/post/1426811916 ) was that although “Pages are property of Facebook and an integral part of their core service/platform, their success depends heavily on the efforts put into them by brands, so rewarding page owners with a rev share on the ads displayed/clicked on their Facebook page wouldn’t be anything strange. I personally see it as a way to foster a virtuous cycle and stronger relationships with brands/companies/artists/etc, which become even harder to break.”

    Your reply was [I hope you don’t mind me quoting a private email, since there isn’t anything really private] : I guess that major brands probably wouldn’t care that much.  The money they would get back would be peanuts to them and they might prefer to have their Facebook pages less cluttered with advertising and un-polluted with third party brands.  Smaller brands might go for it, depending on the amounts involved (and remember AdSense doesn’t generate much for anyone) and whether they can be protected against undesirable ads turning up (competitors and things like gambling, credit cards etc.).

    I agree with your reply and if some sort of “FbSense” will see the light I’m really looking forward to seeing how FB will roll it out. Hoping it won’t be another “Beacon”, or “Deals” 🙂

  • Ah – I remember now. The FbSense that people are talking about now is directly analagous to Adsense – ie a Facebook network running on third party sites. Targeting will be from Facebook Connect data.
    Rev share inside Facebook is something I haven’t thought about too much. At the moment I suspect there it is limited to a small collection of one off deals.
    ________________________________

  • I see. Well, then that was the first bit of my original post. I should claim a exec role at FB I guess 🙂

    However, if the idea is to put ads on third party websites, aren’t we back to the initial problem of people consuming data on FB rather than the original publisher. I’m a bit lost…

  • The two strands are separate – monetise within Facebook and monetise on your own domain, and I think Facebook will support both. The million dollar question is which service will be better for consumers. Thinking as I write, if it is better within Facebook then large parts of the web will start to migrate from an open platform to a closed monopoly platform – that can’t be good for anyone except Facebook (and the regulators who will then get involved….).