Facebook is Testing Subscriptions for Publishers via Instant Articles
New report from Digiday reveals Facebook’s plans.
Last week Digiday reported that Facebook (NASDAQ: FB) is testing paid subscriptions for publishers through Instant Articles. While details have not been released publicly by Facebook, Digiday said that the paid subscriptions will likely support publishers who use metered paywalls or freemium models. The goal would be to work with publishers like The New York Times, The Economist and the Wall Street Journal who would offer some content for free, and put the rest behind a paywall. That content would then require a subscription to access. According to Digiday, publishers will be able to control the pricing, and they will get access to subscriber data available in Facebook.
It sounds like there are some details to be worked out though, including how Facebook will handle the different metered paywall limits various publications have. For example, The New York Times allows readers to access 10 articles for free each month, while The Washington Post allows seven articles per month. In contrast, the Wall Street Journal has a hard paywall. Though the Journal offers some free content, non-subscribers cannot access any paywalled content.
Another detail that has not been disclosed is the handling of subscription payments and whether or not Facebook would get a revenue share. Digiday pointed out that payments could get complicated, particularly if subscriptions are available through an online store like the App Store. Apple typically takes a 30 percent cut of subscription revenue for the first year, and a 15 percent revenue share in subsequent years.
Digiday said that Facebook has already talked to The Times, Tronc, Hearst, The Economist, Bild and Telegraph, and it will begin testing the subscription options by the end of the year with a goal of expansion next year.
Subscriptions for publishers within Instant Articles is the latest way that Facebook is trying to appease publishers who have had mixed reactions to Facebook’s publishing platform. In March, product manager Harshit Agarwal, wrote a post on Facebook’s Journalism Project and how Instant Articles offer publishers more monetization control and flexibility.
“As part of the Facebook Journalism Project, we’ve been in ongoing conversations with the news industry to better serve the needs of publishers and people engaged in news on Facebook. We’ve heard from publishers that having more flexibility and control over their business strategies on our platform is important. One way we’re evolving our products to grant more control is with an update to monetization in Instant Articles,” said Agarwal in the post.
“Over the past year we’ve made a series of updates to monetization options in Instant Articles, in order to make the program a valuable part of publishers’ businesses. However, monetization solutions are not one size fits all. Publishers have told us that different ads experiences, particularly the number of ads in an article, may be right for different audiences or pieces of content,” he added.
Last fall Facebook admitted to miscalculating metrics in a number of categories for Instant articles, including over-reporting an average of 7 to 8 percent of average time spent on Instant Articles since August 2015.
In other Facebook publishing news, in June, Ad Age reported that publishers including the New York Daily News, Penske Media and The Weather Co. have banded together to compete against Google and Facebook in the digital advertising realm. This group of publishers is working with ad-tech firm Sonobi to share user data. Ad Age reported that Google and Facebook will capture an estimated 85 percent of digital ad revenue this year and 60 percent of digital spending. Because the two companies have such tremendous reach, publishers are under pressure from their marketers and advertisers to compete.
In many ways, Facebook’s Instant Articles can be good for publishers such as offering them a secondary publishing platform, faster load times, expanding advertising revenue opportunities, and growing their audience reach, but Facebook is also a distraction for publishers. Publishers can no longer concentrate on their own business models and audiences. Many are finding it necessary to also publish on Facebook or risk losing out on potential readership and revenue.
It seems that Facebook wants to work with publishers in a way that is mutually beneficial, but it has had its share of challenges along the way including the metrics reporting issues and digital advertising competition. It will be difficult to find something that works for the majority of publishers because there are so many different variables and business models. Finding a one-size-fits-most solution will be nearly impossible. We appreciate that they are trying and hope they find something that some publishers will find workable.