Facebook to start monetizing news
In an answer to big media companies that recently complained Facebook’s ‘instant articles’ were failing to boost their bottom lines, the social media giant will look to monetize its news offering. The company’s head of news partnerships, Campbell Brown, said that Facebook will limit the amount of free articles users can enjoy on its site from October. This is a way to get around Facebook’s lack of paywalls, which has become a tricky sell for publishers who charge for access to content.
Facebook’s share price is up by 42% so far this year
SOURCE: Yahoo Finance
Facebook has become a major source of news for its users, and its instant articles feature lets people read more quickly, and find relevant news more easily, than they’ve previously been able to. The downside, for publishers, is that this exposure is costing them money. Where customers might have to subscribe to an online magazine, bringing down its paywall, Facebook has no such option. The result is that anything they post on the site is effectively a product given away for free.
As a result, Facebook will limit the number of stories that can be accessed within instant articles to ten from October this year. Beyond this number, people will be redirected to the publishers’ own site, where they can consider buying subscriptions. As yet, there has been no clarification as to whether Facebook expects a cut of the profit these referrals generate.
Discussing the lead up to this measure, Brown told TheStreet that: “One of the things we heard in our initial meetings from many newspapers and digital publishers is that ‘we want a subscription product – we want to be able to see a paywall in Facebook.”
Dominion holds Facebook in its Global Trends Managed Fund.
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