Some news publishers will lose millions of dollars as Meta is now very reticent to say that there is no place for dedicated news systems on its increasingly algorithmic social platforms. Axios announced, based on anonymous sources inside Facebook, that the company was officially canceling its contracts with major news publishers. The news was later fully but unequivocally confirmed by a representative of Meta, Facebook’s parent company.
Facebook paid news organizations such as The New York Times, The Washington Post, and The Wall Street Journal to list their stories on the Facebook News tab. The deals totaled more than $100 million, with the Times receiving more than $20 million, while the Post received $15 million and the Journal $10 million, according to previous reports. Axios also mentioned, based on unnamed inside sources, that Facebook paid the publications $90 million for news videos.
The contracts with news publishers were negotiated three years ago to prevent some advocates and lawmakers from talking about how Facebook should pay for news content posted on their sites. However, Meta executives absolutely don’t like the idea of having to pay for posts posted on different sites.
Unnamed Facebook sources previously informed the Journal that they were going to terminate these contracts as the company refocused its business model on the nebulous idea of “metaverse”. This means that CEO Mark Zuckerberg and partners have little need for primary content from news publishers since the new model emphasizes algorithmic feeds rather than looking at the posts of those users follow.
Earlier, Facebook had already received blows from laws introduced in 2021 in Australia that forced the company to pay for news content. As the company struggled with this law, Nick Clegg, the company’s president of global affairs, said, “Fewer than one post in every 25 in your news feed will contain a link to a news story, and many users say they would like to see even less news and political content.” Eventually, Facebook launched a $15 million news fund in Australia.
All this suggests that Meta is trying to save money. Since the last quarterly report showed a drop in profitability for the first time in a long time.
