Facebook is eating the world

Illustration: AP

Something really dramatic is happening to our media landscape, the public sphere, and our journalism industry, almost without us noticing and certainly without the level of public examination and debate it deserves. Our news ecosystem has changed more dramatically in the past five years than perhaps at any time in the past five hundred. We are seeing huge leaps in technical capability—virtual reality, live video, artificially intelligent news bots, instant messaging, and chat apps. We are seeing massive changes in control, and finance, putting the future of our publishing ecosystem into the hands of a few, who now control the destiny of many.

Social media hasn’t just swallowed journalism, it has swallowed everything. It has swallowed political campaigns, banking systems, personal histories, the leisure industry, retail, even government and security. The phone in our pocket is our portal to the world. I think in many ways this heralds enormously exciting opportunities for education, information, and connection, but it brings with it a host of contingent existential risks.

Journalism is a small subsidiary activity of the main business of social platforms, but one of central interest to citizens.

The internet and the social Web enable journalists to do powerful work, while at the same time helping to make the business of publishing journalism an uneconomic venture.

Two significant things have already happened that we have not paid enough attention to:

First, news publishers have lost control over distribution.

Social media and platform companies took over what publishers couldn’t have built even if they wanted to. Now the news is filtered through algorithms and platforms which are opaque and unpredictable. The news business is embracing this trend, and digital native entrants like BuzzFeed, Vox, and Fusion have built their presence on the premise that they are working within this system, not against it.

Second, the inevitable outcome of this is the increase in power of social media companies.

The largest of the platform and social media companies, Google, Apple, Facebook, Amazon, and even second order companies such as Twitter, Snapchat and emerging messaging app companies, have become extremely powerful in terms of controlling who publishes what to whom, and how that publication is monetized.

There is a far greater concentration of power in this respect than there ever has been in the past. Networks favor economies of scale, so our careful curation of plurality in media markets such as the UK, disappears at a stroke, and the market dynamics and anti-trust laws the Americans rely on to sort out such anomalies are failing.

The mobile revolution is behind much of this.

Because of the revolution in mobile, the amount of time we spend online, the number of things we do online, and the attention we spend on platforms has exploded.

The design and capabilities of our phones (thank you, Apple) favor apps, which foster different behavior. Google did recent research through its Android platform that showed, while we might have an average of 25 apps on our phones, we only use four or five of those apps every day, and of those apps we use every day, the most significant chunk of our time is spent on a social media app. And at the moment the reach of Facebook is far greater than any other social platform.

The majority of American adults are Facebook users, and the majority of those users regularly get some kind of news from Facebook, which according to Pew Research Center data, means that around 40 percent of US adults overall consider Facebook a source of news.

So let’s recap:

  1. People are increasingly using their smartphones for everything.
  2. They do it mostly through apps, and in particular social and messaging apps, such as Facebook, WhatsApp, Snapchat, and Twitter.
  3. The competition to become such an app is intense. Competitive advantage for platforms relies on being able to keep your users within an app. The more your users are within your app, the more you know about them, the more that information can then be used to sell advertising, the higher your revenues.

The competition for attention is fierce. The “four horsemen of the apocalypse”—Google, Facebook, Apple, and Amazon (five if you add in Microsoft)—are engaged in a prolonged and torrid war over whose technologies, platforms, and even ideologies will win.

In the last year, journalists and news publishers have therefore unexpectedly found themselves the beneficiaries of this conflict.

 

It is very good news that well-resourced platform companies are designing systems that distribute news. But as one door opens, another one is closing.


In the past year, Snapchat launched its Discover App, giving channels to brands like Vice, BuzzFeed, the Wall Street Journal, Cosmo, and the Daily Mail. Facebook launched Instant Articles, which it recently announced will be opened up to all publishers in April. Apple and Google quickly followed suit, launching Apple News and Accelerated Mobile Pages, respectively. Not wanting to be left out, Twitter also launched its own Moments, an aggregation of trending material on the platform to tell complete stories about events.

It is very good news that well-resourced platform companies are designing systems that distribute news. But as one door opens, another one is closing.

At the same time that publishers are being enticed to publish directly into apps and new systems, which will rapidly grow their mobile audiences, Apple announced it would allow ad-blocking software to be downloaded from its App store.

In other words, if as a publisher your alternative to going onto a distributed platform is to make money through mobile advertising, anyone on an iPhone can now block all ads and their invidious tracking software. Articles that appear within platforms, such as Discover on Snapchat or Instant Articles on Facebook, are largely, though not totally, immune from blockers. Effectively, the already very small share of mobile digital advertising publishers might be getting independently from mobile is potentially cut out. Of course, one might add that publishers had it coming from weighing down their pages with intrusive ads nobody wanted in the first place.

There are three alternatives for commercial publishers.

One is to push even more of your journalism straight to an app like Facebook and its Instant Articles where ad blocking is not impossible but harder than at the browser level. As one publisher put it to me, “We look at the amount we might make from mobile and we suspect that even if we gave everything straight to Facebook, we would still be better off.” The risks, though, in being reliant on the revenue and traffic from one distributor, are very high.

The second option is to build other businesses and revenues away from distributed platforms. Accept that seeking a vast audience through other platforms is not only not helping you but actively damaging your journalism, so move to a measurement of audience engagement rather than scale.

Membership or subscription are most commonly considered in this context. Ironically, the prerequisites for this are having a strong brand identity that subscribers feel affinity towards. In a world where content is highly distributed, this is far harder to achieve than when it is tied to packaged physical products. Even in the handful of cases where subscription is working, it is often not making up the shortfall in advertising.

The third is, of course, to make advertising that doesn’t look like advertising at all, so ad blockers can’t detect it. This used to be called “advertorial” or “sponsorship,” but now is known as “native advertising,” and it has grown to nearly a quarter of all digital display advertising in the US. In fact, digitally native companies like BuzzFeed, Vox, and hybrids like Vice, have disrupted the failing publishing model by essentially becoming advertising agencies—which are themselves in danger of failing. What I mean by this is that they deal directly with advertisers, they make the kind of viral video films and GIFs we see scattered all over our Facebook pages, and then they publish them to all those people who have previously “liked” or shared other material from that publisher. 

The logical answer reached by many publishers to much of this is to invest in their own destination apps. But as we have seen, even your own app has to be compliant with the distribution standards of others in order to work. And investing in maintaining your own presence comes at a time when advertising (particularly in print) is under pressure, and online advertising is not growing either. The critical balance between destination and distribution is probably the hardest investment decision traditional publishers have to make right now.

Publishers are reporting that Instant Articles are giving them maybe three or four times the traffic they would expect. The temptation for publishers to go “all in” on distributed platforms, and just start creating journalism and stories that work on the social Web, is getting stronger. I can imagine we will see news companies totally abandoning production capacity, technology capacity, and even advertising departments, and delegating it all to third-party platforms in an attempt to stay afloat.

This is a high-risk strategy: You lose control over your relationship with your readers and viewers, your revenue, and even the path your stories take to reach their destination.

With billions of users and hundreds of thousands of articles, pictures, and videos arriving online everyday, social platforms have to employ algorithms to try and sort through the important and recent and popular and decide who ought to see what. And we have no option but to trust them to do this.

In truth, we have little or no insight into how each company is sorting its news. If Facebook decides, for instance, that video stories will do better than text stories, we cannot know that unless they tell us or unless we observe it. This is an unregulated field. There is no transparency into the internal working of these systems.

There are huge benefits to having a new class of technically able, socially aware, financially successful, and highly energetic people like Mark Zuckerberg taking over functions and economic power from some of the staid, politically entrenched, and occasionally corrupt gatekeepers we have had in the past. But we ought to be aware, too, that this cultural, economic, and political shift is profound.

We are handing the controls of important parts of our public and private lives to a very small number of people, who are unelected and unaccountable.

We need regulation to make sure all citizens gain equal access to the networks of opportunity and services they need. We also need to know that all public speech and expression will be treated transparently, even if they cannot be treated equally. This is a basic requirement for a functioning democracy.

For this to happen, there has to be at least some agreement that the responsibilities in this area are shifting. The people who built these platform companies did not set out to do so in order to take over the responsibilities of a free press. In fact, they are rather alarmed that this is the outcome of their engineering success.

 

To be sustainable, news and journalism companies will need to radically alter their cost base.


One of the criticisms thus far leveled against these companies is that they have cherry-picked the profitable parts of the publishing process and sidestepped the more expensive business of actually creating good journalism. If the current nascent experiments such as Instant Articles lead to a more integrated relationship with journalism, it is possible that we will see a more significant shift of production costs follow, particularly around technology and advertising sales.

The reintermediation of information, which once looked as though it was going to be fully democratized by the progress of the open Web, is likely to make the mechanisms for funding journalism worse before they get better. Looking at the prospects for mobile advertising and the aggressive growth targets Apple, Facebook, Google, and the rest have to meet to satisfy Wall Street, it is fair to say that unless social platforms return a great deal more money back to the source, producing news is likely to become a nonprofit pursuit rather than an engine of capitalism.

To be sustainable, news and journalism companies will need to radically alter their cost base. It seems most likely that the next wave of news media companies will be fashioned around a studio model of managing different stories, talents, and products across a vast range of devices and platforms. As this shift happens, posting journalism directly to Facebook or other platforms will become the rule rather than the exception. Even maintaining a website could be abandoned in favor of hyperdistribution. The distinction between platforms and publishers will melt completely.

Even if you think of yourself as a technology company, you are making critical decisions about everything from access to platforms, the shape of journalism or speech, the inclusion or banning of certain content, the acceptance or rejection of various publishers.

What happens to the current class of news publishers is a much less important question than what kind of a news and information society we want to create and how can we help shape this.

This piece was lightly edited from a speech Emily Bell gave at Cambridge last week titled The End of the News as We Know It: How Facebook Swallowed Journalism.

Emily Bell is Director at the Tow Center for Digital Journalism at Columbia Journalism School, and Humanitas Visiting Professor in Media 2015-16 at the The Centre for Research in the Arts, Social Sciences and Humanities at the University of Cambridge.