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Media Moments 2023: “Publishers blink as Meta cuts off money and traffic”

In this extract from Media Moments 2023, Esther Kezia Thorpe discusses how the already-strained relationship publishers had with the tech giants soured further last year as attempts to force payments in Canada saw Meta block news from its platforms completely.

For years, publishers have been saying that the platforms need their content. Platforms have pushed back, saying that’s not why users come to them. This year, publishers called their bluff, and it’s not going well. 

All eyes on Canada

The Canadian Online News Act was passed by the Senate in June this year. Like a similar law in Australia, it requires tech giants to make fair commercial deals with publishers for the news shared on their platforms. Deals were struck in Australia last year after amendments to the legislation were offered. But with the Canadian law, Meta and Google have argued that it is broader and puts a price on news story links. Consequently, both tech firms said they would block news content from appearing on their products if amendments were not considered.

Come August, Meta followed through on its threat and began stopping users on Facebook and Instagram from accessing news content. Traffic and engagement plummeted overnight, with small publishers being particularly hard-hit. The timing was particularly unfortunate in creating a local media vacuum for evacuees of the Yellowknife wildfires in early August.

Who Meta defines as a ‘news outlet’ has been a point of contention, but essentially, any organisation which had the right under the legislation to be at the negotiating table are the ones Meta removed. What was left behind was just as important as what was blocked: news stories from disreputable outlets, blogs, and one-person operations. 

Google said it would follow suit and remove links to Canadian news from search, news pages and Google Discover before the law came into force at the end of the year. But the search giant reached a last-minute deal at the end of November. Google will keep links to news stories in search results, and will pay $73.6 million (C$100 million) annually to news publishers in Canada via a single collective which will distribute the funds to eligible news agencies “based on the number of full-time equivalent journalists engaged by those businesses”. The Canadian government has committed to addressing Google’s core issues with the bill.

At the time of writing, Google’s deal with Canada doesn’t change Meta’s position, and news continues to be unavailable to Canadians on Instagram and Facebook. Google continues to strike deals with other countries, most recently in Germany where in October it agreed to pay German publishers 3.2 million euros a year for its publication of news content.

Meta has also wound down its Facebook News tab and has stopped funding initiatives it was running alongside the industry such as the Community News Project. 

There have been studies published arguing both sides of the coin on whether the tech giants should be paying anything at all. Research from NERA Economic Consulting – commissioned by Meta – found that news content from traditional publishers is of low value to Meta and declining. It argued that the news industry reaps considerable economic benefit from Facebook. Yet a recent working paper from a team at Columbia University calculated that in the US alone, Google and Meta owe news publishers between $11 billion and $14 billion a year. The methodology is based on recent agreements between news outlets and the tech giants, as well as a database of licensing agreements for similar content-based products.

Perhaps in light of the latter study, the $100 million Google has paid Canada’s news industry is worth it to avoid harsher regulation.

Looking to alternatives

There’s simply not space to chronicle Elon Musk’s complete running of X – formerly known as Twitter – into the ground in the fourteen months since he was forced to buy the platform. But there have been a couple of points which have affected publishers, in particular his decision to strip article headlines out of tweets in August. At the end of November he announced that titles would be coming back to URL cards, but what this looks like remains to be seen. Referral traffic from X has declined sharply this year, with falls ranging from 20% to 48%. 

Increasingly, publishers cannot depend on social media platforms for traffic. Referrals to the top global news sites from Facebook and X have collapsed over the past year, and no newer platforms are looking likely to replace traffic lost elsewhere. Major Google algorithm changes in the UK, US and elsewhere in the autumn only added to the pressure, with some publishers reporting a “drastic decrease in page views and traffic”.

Some are looking at Reddit, while others have jumped early onto Threads. TikTok announced a new contextual ad programme over the summer, courting publishers like Condé Nast and BuzzFeed with promises of a 50% ad revenue share.  

So far, news publishers have expressed caution when it comes to committing more resources to Threads. Despite engagement growing on the six month old platform, limited data availability “makes it difficult to determine whether investing more into the platform is worth it,” noted Digiday’s Sara Guaglione.

Snapchat continues to generate revenue for some publishers. Of its 406 million daily users, it says 70 million watch news content on the platform each month. But the generous 50/50 ad revenue split on offer for publishers has meant some brands like the Daily Mail and Pink News are making good money from the platform.

The broken trust in platforms and the promises they once offered publishers has been a bitter pill to swallow, and we’re likely to see many more casualties in 2024. But the renewed focus on loyal audiences and building communities can only mean stronger business models in the long run.

Media Makers Meet – Mx3 is proud to be the media partner for Media Moments 2023, the report written by Media Voices which analyses and tears down the major media events of the past year. The report is free to download and is available here.