Meta has shunned the news industry, giving less priority to current affairs and political issues on its social media platform while refusing engagement with governments’ efforts to force the US tech giant to pay more money to media organisations.
Facebook’s parent, which has spent years trying to appease powerful publishers, by funding non profit journalism projects and striking agreements with groups such as Rupert Murdoch News Corp., is now taking a more aggressive stance toward the sector. This comes after the company tried to placate them for many years with deals with News Corp., Rupert Murdoch, etc.
Meta was the latest to be snubbed by Threads. The text-based application, launched this month, is a direct challenge to Twitter’s struggling app. The text-based app Threads, which links users’ Instagram accounts to their Meta profiles, attracted 100 million users in just five days.
Two people who are familiar with this move say that the Instagram algorithm, which prioritizes content from creators and their friends over news or politics, is largely replicated on Threads. Adam Mosseri, Instagram’s chief executive officer, said that the algorithm “would not encourage” news to be posted on the platform.
Meta is locked in a battle with the Canadian government after it announced that it would remove news from its feeds for the region as soon as legislation was passed mandating that platforms pay broadcasters and publishers for their content.
The law was intended to help smaller news organizations with less bargaining power. The law is also aimed at Google who said that it would lead to a blackout of news. Two people familiar with the matter say that Canadian publishers who already had agreements for content licensing with Meta will have their contracts terminated at the beginning of August.
Meta temporarily pulled news from facebook in Australia after a similar disagreement in 2021, prompting its critics to accuse the company of using their power to undermine a sovereignty nation.
Paul Deegan is the chief executive officer of News Media Canada. He said that more than 30 advertisers, including the Canadian federal, Quebec, and British Columbia governments, have announced they will stop advertising as a protest against the decision. According to regulatory filings, Canada will account for approximately $3bn in Meta’s annual revenue of $117bn by 2022.
Deegan stated that the company was at risk of losing revenue greater than what they would have paid to news organizations under the Online News Act. He added that other advertisers were expected to follow suit in the next few weeks.
He said: “We are going to reach a tipping-point where the decision to unfriend Canada will be bad for Meta, bad for its shareholders and bad for Meta’s reputation worldwide.”
Meta has tried to court publishers at various times, with initiatives such as video clips or in 2019 with deals to have content run on Facebook News Tab.
The company’s senior executives, however, have concluded that there is a conflict of interest with the newspaper industry. They cite the growth of Facebook’s digital advertising as a reason for the global decline in revenue at newspaper groups.
Meta’s 3 billion users, according to those familiar with its new strategy, prefer short videos and influencer content over news and politics. In 2021, Meta began to reduce the amount of content that users saw in their feeds.
Meta commissioned a study in March that found posts related to current events made up less than 3% of Facebook feeds. A fifth of US, UK and Canada users consider this “too much news”.
NERA Economic Consulting’s report stated that traditional publishers are delivering low-quality news content to Meta, and that this value is declining. Publishers strongly disagree with this claim. Instead, they argue that it increases engagement.
This is partly why Meta has become more combative, especially in its opposition to the Canadian law that supports the news industry.
Meta stated that the Online News Act was based on an incorrect assumption that social media companies benefited unfairly from the news content shared on their platforms. The opposite is true, Meta added, noting that news outlets can use social media to increase their audience and “help their bottom-line”.
The statement continued: “Unfortunately the regulatory process cannot make changes to fundamental features of legislation that have always posed problems, so we plan on complying by ceasing news availability in Canada within the next few weeks.”
One person familiar with Meta’s plans revealed that Meta is evaluating whether the legislation will force it to remove all news links and threads content for Canadian users.
Andrew MacLeod is the CEO of Postmedia. A major Canadian news network. He said the company has been “modelling a short-term decrease in traffic” to prepare for Meta’s blackout.
He added, “It is good that the industry is being shaken up [because] it could create outcomes for a structurally more viable future.”
Pablo Rodriguez, Minister for Canadian Heritage, stated in a press release that the government is “deeply confident that Google and Facebook’s fears can be addressed through the regulatory process”.
“If Facebook believes news is of no value, then they should say that at the negotiation table. He added that threats to remove news in lieu of conforming with laws in our nation only highlighted the power platforms have over news organizations, big and small.
Meta’s decision to withdraw from the news industry comes after allegations that it failed to moderate its applications sufficiently, which contributed to the discord surrounding the election of former US President Donald Trump as well as riots at the Capitol Building in January 2021.
Sandra Matz is an associate professor at the Columbia Business School in New York. She said Meta has decided to discourage news and politics on Threads to avoid further scandals involving misinformation or election denial and to promote moderation.
Mark Zuckerberg is Meta’s CEO. He insists that Threads will be a friendly space, in contrast to Twitter. Twitter has loosened up its moderation after Elon Musk purchased the platform in October for $44bn, frustrating users and advertisers. Meta hasn’t hired any new moderators to run Threads, but instead relies on the Instagram team.
Matz stated that “if they are successful in setting it up how they want it, it will become a platform for culture.” She added that “negative and emotional content” was also important. . . It’s addictive. It will be interesting to see how Threads manages to pull off this.”
Pinar Yildrim is an associate professor of marketing and economics at the Wharton School of Pennsylvania. She noted that news “is not as monetisable” as other content, such as fashion which can be linked to shoppable items. Meta has announced plans to advertise on Threads.
Meta’s critics say that as the split deepens, it will hurt Meta.
Jason Kint is the chief executive officer of Digital Content Next. This trade association represents the digital news industry. “Long-term, the question is if it’s sustainable.”
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