How Facebook is Eating Journalism

facebookbook“Although it may seem like good news for media companies that total digital ad spending swelled 20 percent last year, it’s mostly good news for Facebook.”

U.S. consumers are a skeptical bunch when it comes to their media, giving news organizations a significantly lower approval rating (6%) than even Congress (17%). At the same time, a profound shift is is dismantling the journalism industry as we know it, according to the Pew Research Center’s State of the News Media 2016 report.

As Adrienne Lafrance explains in The Atlantic, “[a] disillusion in media, it seems, is eroding people’s loyalty to individual news brands—or, at least, distrust and decreasing loyalty are happening simultaneously in an age when news consumers have more options than ever for finding news.”

Those consumers are increasingly turning first to Facebook (and similar platforms) for their news, meaning less return visits to news sites and less revenue potential for the site. Meanwhile, Lafrance notes that, over time, “technology companies like Facebook and Apple have become an integral, if not dominant player in most of these arenas, supplanting the choices and aims of news outlets with their own choices and goals.”

The Big Five – Facebook, Google, Twitter, Microsoft and Yahoo – collectively took in 65% of last year’s total online ad spend, Lafrance notes, saying their share “amounted to about $39 billion out of $60 billion overall, and it represents a higher share of revenue among those five companies than the year before.”

Why should we care? How does this actually impact the journalistic process?

“This robust digital advertising market has not lifted most news publishers—even digitally native ones—out of a place of financial uncertainty, as competition for those ad dollars and the rise of consumer ad-blocking poses challenges to their digital business models,” Pew wrote.

Lafrance sums it up:

  1. A small cohort of major tech companies, led by Facebook, has carved out new channels for distributing the news. (loss of distribution control; Facebook “owns” the news)
  2. They’re claiming the lion’s share of ad revenue for themselves (meaning news sites have less money to pay journalists)
  3. They’ve snapped up news consumers’ time and attention, diverting them away from news sites (less repeat visits means even less revenue potential)
  4. And, with features like Facebook’s Trending Topics, they’re dipping a toe into the editorial process, too.

In the end, Pew notes, “there is money being made on the web, just not by news organizations.”

At the end of the day, it seems that news publishers need Facebook much more than FB needs them…they are playing for keeps and the stakes are huge. We should all be worried about what this means to the journalism industry moving forward.