Is Facebook a threat to journalism? Yes, and here’s why

At some point over the past few years, Facebook stopped being a mostly harmless social network filled with baby photos, and became one of the most powerful forces in media—an entity unlike any the world has ever seen, with more than two billion users every day and a growing stranglehold on the advertising market that used to underpin most of the media industry.

When it comes to threats that journalism faces, in other words, Facebook clearly deserves to be on the list, whether it wants to admit it or not. It has taken over most of the distribution system news outlets used to control, and along with that has come billions of dollars in ad revenue—revenue that media companies once relied on to fund their journalism.

Facebook “is already a significant threat and it has been for awhile,” says Martin Nisenholtz, former head of digital strategy for the New York Times. “Along with Google, it is absorbing most of the growth in the digital marketplace.”

In many ways, Facebook’s relationship with media is the classic Faustian bargain: Media outlets want to reach those two billion users, so they put as much of their content as they can on the network. In some cases, they even create whole teams of journalists to create content that Facebook wants, including video. And they are rewarded by the all-powerful Facebook algorithm.

And what do they get in return? The chance to show people their journalism and hope that they can either convince someone to sign up for a subscription, or that they can survive on the pennies worth of advertising revenue generated by their Facebook content.

Even some of the digital-only media entities who have built their businesses on Facebook and catered to its every whim don’t seem to be able to make this equation work. Mashable, which laid off much of its news staff to focus on video for Facebook, is being acquired by Ziff Davis for 20 percent of what it was valued at a year ago, and BuzzFeed has reportedly missed its revenue targets.

Facebook, on the other hand, only reinforces its status as the destination for news by aggregating increasing amounts of it from desperate partners. One recent study found that almost half of the people who got news on Facebook couldn’t remember the original source of the content. In other words, Facebook is slowly replacing media outlets as the brand people associate with news.

The long-term threat goes beyond just getting paid in pennies for producing the content Facebook wants. As digital advertising weakens as a source of revenue—thanks to Google and Facebook’s growing control—media companies are having to rely more subscriptions. But the readers they want to reach are all on Facebook consuming content for free.

The largest journalistic outlets—places like the New York Times, the Washington Post or the Guardian—have the kinds of international brands that will allow them to continue to be advertising destinations, and also get the lion’s share of subscriptions. Media entities that are small and highly targeted may also find enough loyal fans to survive on subscriptions.

But where does that leave the mid-market metro newspaper, which doesn’t have the scale or the reach to mimic the New York Times, but has lost much of its grip on the local market because of chain ownership? Even if Facebook helps with either of those problems, a paper like that risks becoming just another commodity supplier of content to the massive social platform.

“The brutal truth for publishers is that, absent the cost structure and differentiation necessary to create a sustainable destination site that users visit directly, they have no choice but to bend to Facebook’s wishes,” technology analyst Ben Thompson wrote earlier this year. “Given how inexpensive it is to produce content on the Internet, someone else is more than willing to take your share of attention.”

Not only are commodity suppliers usually unable to demand very much in the form of compensation, but they can also be replaced easily—or they might be asked to pay Facebook for the right to reach the users they originally reached for free, something the network has done in the past.

“Facebook seems to be moving towards creating a more robust and curated vertical [for news], and that means they’ll decide which brands they are going to elevate and which they will filter out,” says Emily Bell, director of the Tow Center at Columbia. “There’s an ethical view that this is a terrible state of affairs, since it means that Facebook effectively decides which media outlets survive and which don’t.”

In a recent speech, author Dan Gillmor described a future in which “we will be living in the ecosystem of a company that has repeatedly demonstrated its untrustworthiness, an enterprise that would become the primary newsstand for journalism and would be free to pick the winners via special deals with media people and tweaks of its opaque algorithms. If this is the future, we are truly screwed.”

The nature of the threat from Facebook can be broken down into two general categories, the most significant of which is economic: Since many media companies, particularly more traditional publishers, still rely on advertising revenue to support their journalism, Facebook’s increasing dominance of that industry poses an existential threat to their business model.

According to a recent estimate by media investment firm GroupM, Google and Facebook will account for close to 85 percent of the global digital ad market this year and will take more than 185 percent of the growth in that market—meaning other players will shrink. “This is exceedingly bad news for the balance of the digital publisher ecosystem,” the firm says.

Is any of this Facebook’s fault? Not really. It and Google came up with a more effective way of reaching potential consumers, particularly on mobile. Media companies have failed to adapt quickly enough to digital in general or to mobile, so in some ways they have themselves to blame.

“Did God give us that [advertising] revenue? No,” says CUNY journalism professor Jeff Jarvis. “It wasn’t our money, it was our customers’ money, and Facebook and Google came along and offered them a better deal.” The problem, says Jarvis (whose recently launched News Integrity Project counts Facebook as a major donor) is that “we didn’t change our business models. We insist on maintaining the mass media business model, and that’s more of a problem than social media.”

This doesn’t mean Facebook isn’t still a threat. But it isn’t a threat because Mark Zuckerberg wants to somehow destroy the media industry. It’s like an elephant stepping on an ant—the threat to journalism and to media in general is just something that is happening while Facebook is going about its business.

“Facebook is a threat not necessarily because it’s evil but because it does what it does very well, which is to target people for advertisers,” says Nisenholtz. “Look at BuzzFeed and its latest revenue shortfall, assuming it’s true. There is no company that has done more in a sense to serve Facebook as a content provider and even they’re not achieving their goals.” The question, he says, is “has it become so dominant now that it’s become essentially a monopoly, and if so what should publishers do about it?”

In addition to the economic threat that is taking out journalism’s business model, Facebook also arguably poses a threat to the journalism itself. Into this bucket we can throw things like fake news and misinformation, which works primarily because Facebook focuses on engagement—time spent, clicks and sharing—rather than more substantive measures of quality or value.

In many ways, sociologists say, Facebook is a machine designed to encourage confirmation bias, which is the human desire to believe (and share) things that confirm our existing beliefs about a person or issue, even if they are untrue. As a former Facebook product manager put it: “The news feed optimizes for engagement [and] as we’ve learned in this election, bullshit is highly engaging.”

Facebook has announced a number of attempts to fix its misinformation problem, including a fact-checking project that adds the “disputed” tag to stories that have been flagged by partners. But those efforts have been consistently overshadowed by evidence that some of Facebook’s problems are baked into the platform. For example, research by the Tow Center at Columbia earlier this year showed that posts created by a notorious Russian troll factory were shared hundreds of millions of times.

As journalism entrepreneur David Cohn argued in a blog post earlier this year, Facebook’s main purpose is not information so much as it is identity, and the construction by users of a public identity that matches the group or tribe they wish to belong to. This is why fake news is so powerful.

“The headline isn’t meant to inform somebody about the world,” says Cohn. “The headline is a tool to be used by a person to inform others about who they are. ‘This is me,’ they say when they share that headline. “This is what I believe. This shows what tribe I belong to.’ It is virtue signaling.”

Some of the company’s problems when it comes to news are exacerbated by the fact that, despite some of Facebook’s modest attempts to support news and journalism in a variety of ways over the past year or two, it still isn’t a core focus, and may never be one.

There’s no question that news has become more important to the company than it used to be. Zuckerberg has gone from saying it was “a crazy idea” to suggest that fake news affected the US election to admitting that Facebook does play a role in the dissemination of misinformation, and that Russian troll factories used the platform to try to meddle in the election.

Facebook also supports a range of well-meaning journalistic efforts, including its Facebook Journalism Project, which is aimed at helping newsrooms get more digitally savvy, and the News Integrity Initiative, which Jarvis launched earlier this year with funding from Facebook and a group of other donors.

Former insiders at Facebook, however, say these efforts are primarily designed to be public relations vehicles for the social network, as it tries to stay ahead of federal regulators and others who might want to impose legal restrictions on what it can and cannot do.

“Throwing money at things is a band-aid,” said a former staffer. “They’re not grappling with the real problems their dominance is causing. I left because it became frustrating to know that they weren’t taking seriously the impact they were having on journalism and the news. Not because they’re evil, they’re just much more nimble, and smarter.”

Whether Facebook’s funding efforts are primarily PR gestures (which doesn’t mean they are not doing worthwhile things), the point is that if Facebook cares about these issues at all, it isn’t doing enough to change them. And the reason for that is the same as the reason why Google’s efforts along the same lines tend to be ineffective: Because ultimately they don’t affect the core business of the company, which is to generate as much advertising revenue as possible.

A Google News employee once said that ideas about how to improve it were encouraged, but never got the kind of traction they needed to because they were seen as tangential to the company’s main business. This is a problem at many Silicon Valley companies, where engineering and revenue are seen as the most important, not intangible topics like social value.

Former Facebook employees say the engineering driven, “move fast and break things” approach worked when the company was smaller but now gets in the way of understanding the societal problems it faces. It’s one thing to break a product, but if you move fast and break democracy or move fast and break journalism, how do you measure the broader impact of that?

“I think there’s a possibility that they just don’t know what to do” about any of these larger problems, says Nisenholtz. “I think there’s a chance they don’t have the people in their organization or the DNA to even understand what is going on or what to do about it. I’m fundamentally optimistic about Facebook’s desire to help, but I’m not as optimistic about its ability to help.”

Jarvis, however, believes Facebook does care. “I’ve talked to Chris Cox, the head of product at Facebook, and I believe he cares deeply about news. I think Mark Zuckerberg cares. We have to reinvent journalism… and we should be doing it in partnership with Facebook and Google because they’re a lot fucking smarter about it than we are.”

As much of a threat as Facebook currently represents for the media industry, there are those who believe it could actually get worse. One way it could do so is by continuing to vacuum up even more of the advertising market, to the point where ads are no longer a viable revenue source for media companies at all. For some, that would mean going from ads contributing as much as 60 percent of the revenue to zero.

“The best thing is to have a traditional business and brand but still be flexible and digital,” says Emily Bell. “But there are places where it isn’t really working, like local. There are parts of the media business model that are just broken, like the advertising business—the distribution bottleneck is gone. What the new journalistic business looks like that can not just survive but thrive in this new world we haven’t really figured it out yet.”

Could advertising disappear completely as a viable revenue source? Jason Kint of Digital Content Next—a lobby group that includes some of the largest media brands in the country—says he sees Google and Facebook continuing to dominate “programmatic” or automated advertising. But he believes there is still the potential for other forms of advertising to continue generating revenue for media companies.

Others are much more pessimistic. “Either the advertising business as we know it goes away, or you survive as a media outlet because you are in Facebook’s favor, either algorithmically or otherwise,” says one veteran journalist, who didn’t want his name used because he has to work with Facebook. “There’s no precedent in terms of the size and dominance of it as a media entity, and no one has any idea what to do about it. We are in uncharted territory here.”

There’s another way the Facebook threat could actually get worse: Instead of continuing to be a primary platform for news companies and trying to strike relationships with them, the company could decide to simply wash its hands of news entirely, whether because it isn’t generating enough revenue, or because it has become too much of a political minefield.

For Facebook, it has to be distracting to devote so much of its time and energy to Congressional sub-committees or European Union directives. And for all its attempts to help media companies with revenue sharing or fact-checking, it gets criticized repeatedly for not doing enough.

Moving away from news wouldn’t have to mean getting rid of all news content entirely. It could take the form of a split news feed, one where the majority of content in the main feed is related to personal relationships a user has, and a separate feed includes news articles or content from news brands.

We got a glimpse of what that might look like earlier this year, when Facebook tested a split feed in several Asian and Eastern European countries. News outlets who work in those countries said they saw their traffic from the social network decline by as much as 60 percent overnight.

Ironically, some criticized Facebook for these experiments, because they said the company was messing around with what has become a key source of news for people in struggling democracies like Cambodia, where traditional media is untrustworthy. In many ways, this reinforced the power that Facebook has developed over news consumption not just in the US but around the world.

Could they decide just to give up on news, or relegate it to the sidelines? “I feel like there’s a real chance that they might just decide it’s too much trouble, too much of a PR mess, and they’re not even making that much money from it to begin with,” said one former staffer. “But the genie is kind of out of the bottle now. I’m not sure they can go back at this point.”

The reality is that, in order to really come to grips with what its size and influence have wrought both in journalism and society at large, the company is going to have to not only change its outlook but possibly also its culture. The “move fast and break things” ethos is no longer working, and if anything is holding Facebook back from doing the kinds of things that are required.

The company didn’t set out to kill anything, including media, a former insider says. “Zuck is just a very competitive guy, and he wanted to build the largest company he could. And now he’s won. But they don’t know how to deal with it.” In a way, Facebook is like a band of revolutionaries who don’t know what to do once they topple the dictator and actually become the government.

“Facebook is going to be an important institution, even if it decides it doesn’t want to actually produce journalism,” says Bell. “If it’s here to stay, it needs to be part of figuring this problem out. My worry is that they only see things in market terms, so it’s all about market share. And my biggest fear is that they just sort of give up, and decide it’s just not part of their core vision.”

In that sense, the threat posed by Facebook gobbling up all of the advertising and media content for its own purposes may only be eclipsed by the threat of the company getting out of the business of helping news companies at all, leaving many of them naked and shivering in the cold of a new economic reality.

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