Facebook to Test Paid Subscriptions for Publishers

Aug 02, 2017

Article ImageMedia outlets that have been seeking a fairer deal from Facebook for years may soon be getting their wish. That’s because the social media giant recently confirmed that publisher paywalls are coming soon to its Instant Articles platform.

Consider that two-thirds of Facebook users get news on the site, and more than 44% of all American adults get their news via Facebook, per a News Use Across Social Media Platforms 2016 report by Pew Research Center. With this kind of massive consumer reach, it makes sense that publishers have long wanted a more mutually beneficial partnership with Facebook in the dissemination of their articles and content. Paid news subscription capabilities, after all, could turn freebie readers into paying customers and increase revenues. And it could bring big names, like The New York Times and The Guardian—which have pulled out of Instant Articles—back into the fold.

But be careful what you wish for, say the experts, as questions still linger about how this paid subscription model would work, why it’s taken so long, and who really stands to benefit.

Here’s What We Know About Facebook Paywalls

Content providers likely appreciate that Facebook is trying to play nice with publishers and providing more clarity on this proposed model. “We are in early talks with several news publishers about how we might better support subscription business models on Facebook. As part of the Facebook Journalism Project, we are taking the time to work closely together with our partners and understand their needs,” Campbell Brown, Facebook’s head of news partnerships, said in a prepared statement.

Here’s what publishers are currently being told according to a source familiar with the proposal:

  • users will be able to view at least 10 free articles per month before the paywall kicks in
  • publishers will have full control over their subscriber data and locked vs. unlocked articles
  • this proposal will also support freemium models; the feature will enable authentication for existing subscribers
  • Facebook plans to test this model with a small group of publishers before year’s end, with hopes of expansion in 2018 if the test is successful.

Paywall Pros and Cons for Content Providers

However, many industry insiders remain skeptical about the dynamics of this deal for publishers. “Offering paid subscriptions is long overdue from Facebook, which has taken advantage of publishers and extracted more value from them than they’ve given back,” says Steve Smith, editorial director of events for Mediapost and digital media editor for Media Industry Newsletter. “A paywall makes life a little easier for some of the big players like the Wall Street Journal or The Economist who’ve already succeeded in extracting value from their customers. But I’m not sure it’s going to be of much help to other publishers who have yet to move to a paid relationship.”

The concept of metered paywalls via Instant Articles sounds like a good idea to Scott O’Neill, vice president of North American strategic sales for MPP Global, but there are caveats to consider. “It gives publishers the ability to monetize their content without being beholden to advertisers,” O’Neill says. However, “the Facebook model is no substitute for the publisher having a direct relationship with their audience, which allows them to bundle content in different mediums, including priming and upselling complementary content.”

News industry analyst and Newsonomics author   echoed those latter sentiments in a recent article, in which he wrote: “Everything we know about the successful digital reader pay models is based on relationships. Can Facebook, or other platforms, figure out a way to help publishers cement paying subscribing relationships with readers? Any solution that inserts Facebook or another platform into the relationship between publisher and reader is one to approach with great wariness.”

Other Considerations

Smith also cautions that a publisher’s brand and image could suffer when its content is distributed via Facebook. “Facebook has created a digital mode of delivery with interfaces that are clunky, cluttered, chaotic, and incoherent in the media environment,” says Smith. “Media outlets have carefully built their brands on and distinguished themselves through the environments they’ve created. But Facebook offers a mode of media distribution that dilutes the publisher’s brand and revenue base. It’s not an environment that gives a publisher a great opportunity to make a case for their brand—your content is going through an algorithmically-driven feed that has no particular order.”

Plus, “I’m skeptical that Facebook is going to be an effective route for new subscribers to sign up with any of these paid players,” Smith adds. “If you like The New York Times, you’re not just suddenly going to discover them and the value of their subscription on Facebook.”

Despite these concerns, hope remains that this forthcoming model will benefit publishers who want to diversify their revenue streams. “The opportunity cost for not [partnering with Facebook on a paywall] could be huge,” says O’Neill. “It’s never going to replace a publisher’s main website, but it could become common practice if enough publications come onto the platform and if tech costs remain low.”

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