Never Ever Getting Back Together: The End of the Social News Era

The New York Times published the divorce announcement for the platform-fueled content era in October with the headline: “Silicon Valley Ditches News, Shaking an Unstable Industry.” Proof of the irreconcilable differences: Meta announced news head Campbell Brown formerly left the company and the artist formerly known as Twitter removed headlines from article posts. And, of course, Meta exec Adam Mosseri declared that Threads has zero love for news. There was nothing factually wrong with the NYT article, it was just a few years late.

Part of my last job at Condé Nast was overseeing the company’s relationships with big platforms like Meta, Alphabet, Apple, Amazon etc. At even a major, premium publisher like Condé, these relationships feel like being in a fishing skiff surrounded by aircraft carriers. At best, you try to build a healthy “balance of trade”, where you’re maximizing the value you get from the platforms, while minimizing dependencies and audience disintermediation. Much of the time, though, you find yourself trying to adjust to the new landscape created by platforms' tectonic shifts in product and business strategy.

The first sign to me that Facebook was turning its back for good on news (which I’m using as short-hand here for professionally produced news, lifestyle and information content, especially of a non-video variety) was in Fall 2021 when they rebuffed any renewal discussions around Conde’s Facebook News Tab deal as it was entering its final year. (For a refresher on Facebook News, click here.)

Then in February 2022, Facebook announced they were removing “News” from the name of its main “News Feed.” To me, there was no bigger sign of Facebook’s future intent than this simple rebranding. When it came to publishing and Facebook, it was clear to me, that as the world’s greatest philosopher on relationships sings, “We are never, ever, ever getting back together.”?

Media, of course, wouldn’t mind rekindling the romance; the news/platform uncoupling is decidedly unidirectional. If you talk to executives that run long-form, text-focused subscription businesses, from newly capitalized start-ups to legacy brands, they are all reliant on paid advertising on Facebook and/or X for subscriber acquisition. As the cliche goes, you have to fish where the fish are; and the fish do not spawn on news and entertainment websites.

By early 2022, we moved to take the Facebook News money out of our U.S. budget going forward, though deals for UK and Germany would continue on for significantly longer. Credit the momentum of product teams, because Facebook News didn’t launch in France until February 2022, even though it was clearly DOA. Losing the Facebook News funds, which were basically 100% margin, wasn’t fun, but it wasn’t a shock. We never hired people based on the program or changed strategy because of it. Part of the business development function at a major media company involves a constant search under the metaphorical couch cushions for change; we just had a few more dollars to find.

The changes to Twitter, now X, under Elon Musk have added to the media heartache by eroding another meaningful source of audience. While referrals from Twitter was never as substantial as Facebook or Google, individual Twitter users were often more valuable as they often showed a higher propensity to subscribe than visitors from other social platforms. To some larger media companies, however, the disruption to Twitter’s ads and video businesses presents an even bigger problem, as the platform provided one of the few places outside YouTube to drive pre-roll supported video views at scale. X’s CEO Linda Yaccarino has suffered her fair share of self-inflicted wounds, but content providers will embrace her if she can revive Amplify and bring back advertisers to support it.

It is true that media’s relationship with social platform companies has long been volatile. In September 2017, the analytics company, Parsley, published a report that Google had again usurped Facebook as the top refer to publishers. In early 2018, Digiday reported of publishers “losing hope” with Facebook. Often the media world feels like “Déjà vu, all over again” to quote another sage, Yogi Berra.

The real difference, of course, over the last 18 or so months is the mainstreaming of artificial intelligence. Most existential for publishing is the potential impact of generative AI on Google search, media’s last solid and seemingly stable avenue for distribution and audience acquisition. Google has been grabbing a greater share of search results for its own products for a long time, but media companies could take solace in the fact that Google’s interests are much more closely aligned with the open web. But generative AI threatens a future where computer simulacrum swamps quality content and chat-like search chokes off referral traffic. Whether or not consumers want narrative, paragraph-long search results or to constantly talk to their computers remains to be decided IMO; more on this another time.

As I was trying to remember the history of the News Tab, I went back to watch the October 2019 detente between Facebook CEO Mark Zuckerberg and News Corp CEO Robert Thompson hosted at the Paley Center in Manhattan. What I remember from being in the audience that day was the fake congeniality; a confident, pre-swole Zuckerberg happy to not be facing a Congressional grilling like he’d suffered two days earlier; and Thompson’s wry comments and literary remarks, which he largely read from a few sheets of paper and notecards. I didn’t remember the hyperbole: Zuckerberg told the audience, “I just think every internet platform has a responsibility to fund and form partnerships for news.” In the meantime, Thompson declared that Facebook News was a “platform that actually is significant for the future of journalism,” one that sets a “powerful precedent… (and) begins to change terms of trade for quality journalism, establishing the principle of payment.”

A few years later, why did Facebook no longer feel responsible for paying for news? Probably because the money didn’t buy the anticipated goodwill, stanch the criticism about the amplification of fake news and disinformation, or prevent legislation seeking to compel payments to news providers to spread from Australia across Europe and to Canada. Without these benefits, it made no sense to pay money to support a service that Facebook could largely recreate anyway under its terms of service, which allows the company broad rights to repackage content posted to its platforms and, while each post drives fewer users, not many content creators have given up on using preview posts to attract users. Finally, I’m guessing that the effort fell short of the service’s modest goals for engagement: Zuckerberg projected the service would eventually attract 20-30MM users out of Facebook’s now three billion global MAUs; the News Tab could disappear without many people caring.?

Thompson and his best friend, Rupert Murdoch, should be credited with squeezing significant, if fleeting, money out of Facebook (and Google), after a long-game of public critiques, and for leveraging their influence over Australian politics into the News Media and Digital Platforms Mandatory Bargaining Code. It's worth a read if you’re so inclined, but unfortunately, I don’t think government-required subsidies are a solution for media woes. From what I’ve seen of the payment regimes rolling out across key European countries, the funds that news organizations receive may save a few jobs, but the money doesn’t come close to covering the structural declines in advertising and audience, as well as the technology-driven shifts in consumption habits and user behavior that are challenging the underlying business. And few payment recipients are willing to push back on the contribution calculators that govern the distribution of these funds and are built and managed by the platforms themselves.

In the meantime, Thompson, IAC head Barry Diller, and other media CEOs have turned their attention to AI companies for payment. On a recent episode of the Hard Fork podcast, NYT reporter Kevin Roose described the building of large language models off the content of writers, artists and creators without compensation as the “original sin” of AI. I fully support IP-holders seeking remuneration for the use of their content in AI models, but I have a hard time believing these payments will produce a meaningfully different result than what we’ve seen in the social space. I hope I’m wrong.

As we’ve come to grips with the end of the social news era, some industry insiders and outside observers have chided media companies from having ever leaned into working with social platforms or taking their checks. A recurring theme of the Digiday conferences prior to the pandemic was that publishers were suckers for having built businesses in partnership with social media. Nevermind that one media CEO who delivered that critique at multiple conferences turned around a legacy media business almost exclusively on the back of Google search. At least he had the foresight, I guess, to pick the horse with more staying power.

I think the reality is that many media operators did err by optimizing first for social, building a business model dependent on monetizing audiences based on platform reach, and thinking that access to social audiences would grow unimpeded. That is indeed a sin in a business that has always required building multiple revenue streams and navigating constant change. But it is also true that executives would be silly to ignore the reality in which they operate. Trying to manage a media business without looking to find users where they live (on apps on their phones), dismissing how they navigate the web (largely via Google for content and Amazon for commerce), or ignoring the content formats they consume (increasingly video in short-form) is a quick path to obsolescence.?

Back to the NYT article I referenced at the start of this post, one of the other things that jumped out to me, was a quote by Ben Smith, the SEMAFOR co-founder and former BuzzFeed News editor, who suggested that that “web traffic was no longer ‘the god metric in digital media.’ He said intermediate platforms like SmartNews , Apple News and Flipboard were becoming more important to publishers.”

Flipboard!!! Flipboard??? I couldn’t help but laugh and feel a little depressed simultaneously that an app that has been around so long, folks often ask if it is still in business, is presented as a solution for media's current predicament. Now, I know that Ben wasn’t actually saying that news reader apps were going to replace the audience (and related revenue) that publishers have lost. But news aggregators, whether web- or app-based, pre-date the rise of the social web and have been a part of the revenue and audience mix of publishers back to the days of web portals. News aggregation and Smith’s quote was originally meant to be the core of this post. Given it’s taken me ~1750 words to get here - and I’ve yet to achieve Matthew Ball status - however, I’m going to hold my breakdown of that topic for my next post.

I hope you found this post fun and informative. As always, if you’re interested in chatting about media, publishing, AI, or tech, you can reach me here: MountProspectPartners.com.