Is it time for Facebook to pay its pipers?

The rules of engagement in the media world aren't as steadfast as they seem. Photo/Getty Images.

COMMENT:

It might sound a little mad, but a creative expert recently suggested that it might be time for Facebook to start paying media companies for their content.

Speaking to the Herald about the state of media, ad executive Levi Slavin mused that it was important to question the norms that have been shaped almost inadvertently over the past decade.

"Maybe we should even reconsider who pays who," said Slavin, who as chief creative officer at Colenso BBDO, is paid to find creative solutions to complex business problems.

"Currently readers pool together their coins to cover the salaries of trusted journalists and the running costs of historic news publications. If the platforms paid the news subscription direct, we could not only protect the future of our precious news providers, we would set a standard for legitimate news content for every reader. No matter their feed. Or algorithm. Or echo-whatsit."

Ad executive Levi Slavin thinks it might be time to rethink the money arrangements in digital media. Photo/Supplied.

The idea of an organisation such as Facebook paying for the content that is already widely distributed on social media might seem far-fetched, but it was also recently mooted by former New York Times executive editor Jill Abramson at the Readers and Writers Festival in Auckland.

It's also worth remembering that the rules of engagement with social media are loose and have only been developed over the past few years, and there's no reason the established way of doing things can't be challenged.

So now for the obvious question: what's in it for Facebook?

First, if all the big mainstream media publishers made a protectionist move and refused to put their content on the site, it would create a vacuum which could potentially be filled by, at best, less reputable sources and, at worst, fake news. This would further complicate Facebook's growing credibility issues.

Facebook expressed interest in supporting news gatherers this year by promising to pump US$300m into various local journalism initiatives around the world. The Herald understands that Facebook will discuss investment initiatives in local news with New Zealand publishers over the coming months. The details of these initiatives are still unclear at this stage.

A Facebook spokesman would not directly answer a question on whether Facebook would be open to paying local news providers for their comment but did explain that the company is working on a number of programs and products to help news publishers effectively monetise their content and make it easier to differentiate reputable news sources from those with dodgier motivations.

He also said news isn't the only reason people go to Facebook.

"In fact, news makes up less than five per cent of an individual's news feed on average — but we share the goal of supporting a sustainable news ecosystem," the spokesman said.

Despite this, he went on to explain that Facebook is taking steps to help weed out the more questionable information being distributed through its platform.

"We're working with publishers around the world on a number of pilots including breaking news and developing news tests as well as pilot programs to support increasing user engagement through subscriptions, newsletter sign-ups and app downloads," a Facebook spokesperson said.

But what, if instead dabbling in such tech tweaks and other initiatives, it invested an annual sum of money directly into selected partners who could then become the reputable sources of news on the platform?

Facebook could simultaneously use its algorithm to limit the spread of news stories distributed by users, while prioritising that of its trusted content partners, who would be vetted before any agreement is made. Not only would this help Facebook's reputation, but it would also help to stifle the viral spread of fake news. It would also give Facebook a bit more wriggle room in defending its widely contested view that it's just a platform.

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Also, at a time when Facebook is facing the growing risk of regulation, collaborative steps like these could play a big role in improving the social media giant's relationship with local lawmakers. If the company is supporting local journalism through syndication deals, then it may be treated a bit better by legislators ill-equipped to solve the problems facing media.

There may also be a financial incentive for Facebook in doing this. The company recently started reporting its locally earned revenue in New Zealand, which in turn means it will be line for bigger tax bills in coming years. Perhaps, if Facebook - and even Google - returned some of this money to the news media companies, there could be scope for tax break.

The original sin

A quirky line in an ESPN football column recently imagined a world in 2550 in which Facebook, Google, Apple, Amazon and Microsoft are the only remaining global institutions.

While a tongue-in-cheek reference, it does have an element of resignation, hinting at the fact that all other entities are powerless against the might of these giants.

So how did we get here?

Well, there have been mistakes made - and sometimes they've been repeated. The original sin of media companies was, of course, giving away their content for free in the early days of the internet. Then, as is often the case with the most delicious sins, they went back for a second helping, by giving away their content to the social media providers only a few years later.

In the hunt for clicks, viral success and the promise of one day reaping financial rewards, established media companies clamoured over each other and a new breed of tech start-ups to get their articles on social media.

After years of waiting, it's now safe to say those financial rewards are not coming. And while it is frustrating, It's also important to finally acknowledge this because it's the first step toward trying something different.

Speaking to the Herald this week about his company's recent financial result, MediaWorks chief executive Michael Anderson said the major mistake media companies made was buying into the belief that they would automatically get their hands into the digital revenue coffers.

"Where we all got caught a few years ago was in looking at the overall digital number. It looks quite strong, but we all know it's dominated by search and social. So the pie we play in is quite small," he says.

It's a point driven home by the latest advertising spending figures for New Zealand. While the digital advertising figure has skyrocketed to more than $903 million and now accounts for over 34 per cent of total ad spend in the country, digital ad spend across television, newspapers, radio and magazines accounts for only 6 per cent, or $159 million.

Suffice to say that mainstream media are fighting over scraps, while the big dogs eat their lunch.

Google and Facebook will likely always dominate search and social respectively, but with the rise of paywalls across the world - at the Herald included - media companies have again realised that their most valuable commodity remains what they create every day. And they're becoming less willing to give that away for free.

It doesn't take long rules of media to change, and it's anyone's guess what they might look like in the next 10 or 15 years.

Is it too late for a CTO?

Solving complex issues like this is certainly part of the reason why the Government was so eager to create a Chief Technology Officer role last year.

Following the mishandling of Derek Handley's attempted employment, this has now been replaced by "a small group of people" who will assist in mapping a policy guide to New Zealand's technology environment.

But this really seems a missed opportunity. What this space needs is a champion willing to put their neck out, question the status quo, come up with interesting ideas and look for solutions that might not seem obvious.

Some of the ideas suggested might seem outlandish at first, but it's also worth remembering that no one would've predicted a world in which virtually every established media company in the world gave away their content for free.

One need only look at the example of the privacy commissioner John Edwards to see that a single dedicated, a critical voice can help to draw attention to big issues - even when they're as dry as privacy.

It's not clear who that person might be person might be when it comes to the tech sector. But it seems a little pre-emptive to give up the search after one disappointingly public mishap.

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