Meta has gone on a free-curve loop ever since it changed names back in 2021; even more so than its various transformations since it began, as Facebook, in 2004. On its current run, Meta’s further leaning towards AI-based content recommendations to keep users engaged in its apps. That’s all right and all, albeit being a bit more annoying for users, but do you know what Meta doesn’t need as much as it used to? News content. 

Ink Is Out

Meta could not have been more clear with its intent to cut ties with news publishers. Meta has withdrawn its investments in news initiatives, including its dedicated News tab, instant articles, and even its newsletter offering, directly noting its de-prioritization of in-stream political news.

This explains why the latest push in the US to force Meta to pay more to news publishers is particularly ill-timed, and perhaps, ill-fated. This week, reports suggest that the controversial ‘Journalism Competition and Preservation Act’ (JCPA) has been added to the annual defense authorization bill, which could see it carried into law come 2023. 

The JCPA would basically act like a steroid for US news outlets, facilitating an exemption under US antitrust law to allow them to collectively bargain with social media platforms to negotiate larger ad revenue sharing, in exchange for using their content. In short, news publishers can essentially charge Meta and force it to pay for links to news content in its apps. In this case, Meta’s size and reach can actually work to its disadvantage.

It has always been a bit of a controversial policy approach; it was before and continues to be so now. However, the Australian Treasury Department recently reported that its similar Media Bargaining Code has mostly been a success, redirecting millions into the local media market. Australia’s success now has other nations paying attention, with New Zealand now already considering its own version of the same.

Then again, Meta probably doesn’t need news content anyway, at least not as much as it used to. Meta can cut off the process entirely, which it has already threatened to do. There is a level of posturing here, and it seems unlikely that Meta would boot news content entirely. But that’s what it did in Australia, amid negotiations over the media bargaining code. Then again, Australia has a smaller news ecosystem compared to the US.

So, would Meta really move to block all US news organizations from sharing content in its apps? If it did, how much of an impact would that make? This is entirely the point of the debate. On one side, you have the newsboys reporting that Meta is pretty much piggybacking off of their content, generating heaps of engagement and revenue. On the other hand, here you have Meta saying that news isn’t as big a deal as publishers make them out to be.

The Wrap

If you’ve been paying attention, Meta has been distancing itself from news content over the years, leaning more into TikTok-like approaches and showing users more video clips and entertaining content. AI-based recommendations also increased exponentially. Given these, Meta is actually in a position to cut off news entirely, with, at most, a partially negligible impact on its revenue generation. Though it’s still relatively early, Meta does look like it’s on its way to eventually square off against publishers in several regions come the new year.

Sources

https://bit.ly/3HlkTlv