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Facebook has created a scary new world for media companies.
In the last few years, much digital ink has been spilled over what happens to content in a future where Facebook — and potentially Snapchat and other messaging apps — entirely control distribution instead of the content creators themselves.
The question for a company like Business Insider in this new world is: How do you get readers to your content, and advertisers to sell against it, when readers don't discover it on businessinsider.com?
Well, that future is here, and the big shift in the media industry is simple: Content distribution is now controlled by companies that first solved for the distribution but are now solving for the content, instead of doing it the other way around.
Back in the golden era of newspapers, a publisher might've enjoyed a monopoly or duopoly on news in a region or city, allowing it to tell their editors to just cover the most important news of the day and not worry about how people were going to find it. Discovery was a given.
The industry then began fracturing, first with large publishing companies buying up several newspapers and putting them under the same umbrella, then with cable news, then with the internet, and now — leaving out a whole bunch of stuff — here we are.
On Monday, John Herrman had an excellent overview of this worry in The New York Times, with his piece including a startling stat from Morgan Stanley, which indicates that in the first quarter of the year $0.85 of each dollar spent on online advertising will go to Facebook or Google. Note: John's work on the future of content at The Awl is required reading for anyone interested in the subject.
This stat also dovetails with the following chart — highlighted in another great piece on the topic by Conor Sen over the weekend — that makes one thing clear: The advertising is following the distribution.
So what seems scary for publishers is that their distribution — which controls how many people see your stuff and thus affects how much you can command for ads — is now in the hands of a few tech companies that many think are (largely) indifferent to the content they distribute.
But I think this worry — that Facebook and Google News don't care what they promote — is overblown and a bit hysterical.
Also writing in The Times, Jim Rutenberg notes that the analytics digital-media companies now have about which of their stories are succeeding and which are falling on deaf ears very much resemble television ratings that have long driven the cable-news cycle. See: Trump, Donald.
So while this is a jarring prospect for many journalists who came up with newspapers and magazines, which focused on sales of the brand rather than sales of any individual story, it is now a reality for media companies faced with the dual pressures of finding creative ways to tell stories and creative ways to pay bills.
Conor argued in his post that Facebook will eventually be forced to pay for content directly. Ad-sharing inside of Instant Articles — or posts that keep readers on Facebook instead of directing them back to a host site — is an example of that already happening.
Conor thinks that there's also potential for Facebook to buy a content company outright or invest in its own content — e.g., hiring journalists to write about whatever. I'd tend to agree.
For another example of how Facebook might go about building up its own network, Peter Kafka's recent podcast with venture capitalist Hunter Walk includes a good discussion of the early days of YouTube, when popular vloggers were given cash by YouTube to keep doing their thing. This would also seem like a possibility for Facebook.
All this, however, ignores that Facebook does have all the content it would ever need — for a distributed news product, at least. Every media organization out there wants to be a part of Facebook's distribution firehose. But the oft-forgotten part of this equation in media circles is that Facebook needs the content firehose distributed onto its platform just as much as the content creators need Facebook.
The Information recently reported that organic sharing of personal news on Facebook has been in decline. This means that while Facebook has over 1.5 billion users, it is likely to look not to individuals but companies, brands, and celebrities to fill the content gap.
Recall that Facebook and Google accounted for 85% of digital-ad spending in the first quarter, but only because the ad dollars followed the distribution.
If Facebook becomes a less dynamic content network, then you'd think these ad dollars will find their way to a more engaging platform — looking at you, Snapchat. See also: Facebook is making a huge push into live video.
And so this is not a parasitic relationship but a symbiotic one: You, the media company, need Facebook and Facebook needs you.
There is a lot that is scary for any company that does not appear to be in complete control of its destiny, as many content creators would right now argue that they are not. Combine this with layoffs and missed expectations in the industry, and the future appears bleak. It is hard, sometimes, not to say the sky is falling.
But while right now is certainly a rocky period for the media — and one that may well persist for some time — Facebook is not some giant that will simply take all of our jobs like a content-devouring robot. It is merely the platform that is just now learning how much it needs you just as much as you need it.
Change is hard.
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