Facebook increasingly seen as competitor to content companies

By September 20, 2011 8 Comments

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:


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