The New York Times And Its Faustian Facebook Pact

Editor’s note: Tom Goodwin is senior vice president of strategy and innovation at Havas Media.

Quality news content providers are between a rock and a hard place.

The second worst decision they could ever make is to give their content for free for Facebook to host, but probably the very worst one is not to give it away at all.

It all feels a bit like the music industry in 2006 when labels were doing deals with streaming services. The services offer a chance to reach more people — to put music in the hands of people who perhaps would never pay for an albums — but at the same time risks devaluing the content, almost intrinsically because access becomes easier.

Newspapers like The New York Times are like many legacy companies facing the deeply unfair reality that they tooled up and invested for another age.

Like taxi medallion owners, stores like Borders or Blockbuster, or manufacturers like Kodak; news organizations have complex, expensive assets to make and distribute things that in a digital age are abundant, undervalued, and intangible.

The Times now spends vast sums of money on the salaries of journalists, writing world class content that gets printed overnight and spread around the country in complex logistical operations.

News organizations have complex, expensive assets to make and distribute things that in a digital age are abundant, undervalued, and intangible.

Facebook on the other hand makes code, hosts a few petabytes of data on it’s server, and then gets to monetize (with the best personal data ever known) right at the spot where all the money is made — the customer interface.

True, many of these companies made stupid mistakes, Uber is killing taxis because the entire industry rested on it’s laurels while under the protection of a wall of regulation; Kodak and Blockbuster were arrogant and dismissed the idea that anyone could overtake them; Nokia made smartphones before Apple, but failed to see that it was about software and experiences, not hardware.

Other industries like travel agents and the music industry just became a victim of software eating the world.

In this environment the question for the news business becomes not if they should change, but how do they change.

Hosting content on Facebook doesn’t seem like the hardest move for media owners who currently have an advertising only funding model. From the native only Buzzfeed, to the Guardian or BBC, this seems like a way to make more money, get more eyeballs and most likely learn more about how content behaves.

For others it’s not so simple.

Quality news from the New York times or Bild, being available for free via Facebook, spreads content further, but also undermines it’s entire subscription model, which happens to represent the major growth in their business and potentially their best hope for the future.

So does the New York times see this as free content marketing to gain subscribers, or as incremental advertising revenue? Only time will, and maybe they don’t even know?

Whether it feels like a hard or easy choice, this is going to mean the continuation of tough times in journalism.

The Death of News Brands.

We were used to consumer news that was produced and curated by the figures at the top of the news masthead. We’d buy the Times and navigate that paper, and our relationship was with the brand.

We’d read widely across subjects with the commonality being the news provider.

In the modern age the front page is now Twitter or Facebook, we read at an article level, the subject matter, the point of view, the writer become the brands, the newscasts fade in importance. Is this article reflecting better on TechCrunch for hosting or Tom Goodwin for writing? How does that change when you see this via social media?

We’ve seen the same evolution in music and television. Where we once bought albums, or watched NBC on a Saturday night, now we tend to love specific songs and enjoy Breaking Bad without a thought to the channel. When content becomes unbundled from provider, the provider loses control.

Things change.

This loss of control could ultimately prove deadly, Facebook may appear to be playing nicely, to host content for free and pass through 100% of the ad revenue, but is this balance of power going to stay that way?

Facebook doesn’t have the best track record of keeping things in brands’ favors, what was free access and too good to last, became a pay to play model. When Facebook becomes our portal to the web for so much of the world, news brands become the more desperate parties in the mix.

Where does that lead to?

It’s an interesting time in news content, how news gets produced, monetized, distributed is set to change.

Will Native become the preferred route? Will micro payments or bundling finally help brands extract money for valuable content? Will other revenue streams from eCommerce or commercial partnerships become as big as some think?

One thing for sure, this is an experiment, but while deals can be cancelled, consumer behavior doesn’t unlearn, and a Faustian pact can’t be undone.