Rupert Murdoch wants Facebook to pay for the news

Rupert Murdoch, the executive chairman of News Corporation, today issued a statement calling for Facebook and Google to subsidize the news traveling through their platforms.

In the statement, Murdoch calls on Facebook to pay a carriage fee, as cable companies do with pay TV, to trusted publishers that are posting their content on the social media platform:

I have yet to see a proposal that truly recognizes the investment in and the social value of professional journalism.

The time has come to consider a different route. If Facebook wants to recognize ‘trusted’ publishers then it should pay those publishers a carriage fee similar to the model adopted by cable companies. The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services.

This comes fresh on the heels of a change to Facebook’s News Feed algorithm, which prioritizes posts from friends and family over those from publishers and content providers. Facebook said that the change was meant to increase well-being among users, offering a more proactive way to build a community and positive sentiment across the network.

But Wall Street didn’t react well to the change, which Facebook predicted would decrease time spent on the network, which ultimately will decrease the time users spend looking at advertisements.

As part of the announcement, Facebook’s News Feed chief Adam Mosseri didn’t have many concrete suggestions for publishers worried about decreased visibility on the world’s biggest social media platform, simply saying publishers should try “experimenting … and seeing … what content gets more comments, more likes, more reshares.”

This also follows an ongoing situation around news credibility on social networks like Facebook. The spread of fake news across the internet, most noticeably on social networks like Facebook and Twitter, may very well have changed the course of the 2016 election. Whether it was sparked and spread by foreign actors like Russia or domestic political groups, it has forced Facebook to try to remedy the situation over the past year.

Facebook’s original entry into the world of media, the launch of Instant Articles in 2015, has spurred voracious consumption of news on the platform. Pew says that around two-thirds of U.S. adults get their news from social media sites, with 20 percent saying they do so often.

This has disenfranchised many publishers who require a direct connection with readers to maintain credibility. If all articles look the same, and many “readers” are looking at an entirely different “front page” on Facebook, establishing the one and only truth of any matter becomes more difficult.

And let’s not forget that the media industry is in its own, continued transformation as century-old print publications try to move digital.

Murdoch, one of the most successful people in news media, doesn’t see much progress with new business models such as subscriptions and pay walls, but does see an opportunity in making the pipes pay.

An unrealistic proposal

However, on closer inspection his suggestion is disingenuous. To publicly issue a carefully scripted statement with questionable insinuations (Facebook is equated to a cable provider) and very few details is more mud-slinging than muckraking. We’re not saying Facebook shouldn’t be paying somebody something, but this isn’t a realistic solution and I don’t think Murdoch really believes it is either.

Carriage fees are pretty simple. Your cable provider pays a fee per subscriber to networks like ESPN and AMC in order to carry their programming; these fees vary from under a dollar for specialty or less popular networks (AMC, FX) to more than $6 (ESPN, by far the most expensive). The idea is that you as a subscriber are paying for access to these channels, and then paying for the convenience of having them delivered to your TV by the cable company. The $40-50 is really only routed through the cable companies for convenience (yours and theirs).

But while that makes sense for a cable provider with millions of subscribers in a single region of the U.S., all paying $50 or more for the privilege of watching live TV, it’s a poor match for the likes of Facebook.

Facebook’s “viewers,” just off the top of my head:

• are all over the world in different regions and jurisdictions
• don’t choose what they see (nor does Facebook, arguably)
• pay nothing
• are already monetized indirectly by both Facebook and publishers

If Facebook pays a carriage fee for the privilege of carrying content from the Hindustan Times, and it shows up as a Facebook Instant Article in an American’s news feed because a British PR firm paid for it to be promoted, because it wants to drive subscribers, and it does… who exactly owes whom what? Who is paying what, for what? Who determines what is “trusted,” and what would happen to sources that aren’t “trusted”? Should Facebook literally pay every site a fee for every one of its billion (or however many) users, for the possibility that someday, some item may show up in any of those users’ feeds?

You can see that this quickly descends into chaos. Murdoch’s suggestion is a horse and buggy solution for a company working on self-driving cars.

Clearly something else is needed. Facebook is raking in cash and is confident that companies like Murdoch’s can’t survive without the reach that social media provides. Why would it as an ostensibly objective platform for users to post content attempt what is “trusted” and then pay them for the title?

Supposedly, trusted publishers pay for promotion on the platform and receive value in the form of readers, who view their ads and may eventually buy a subscription. Of course, Facebook undermines this value proposition all the time and publishers are upset at their emasculation and inability to dictate terms, as many have for decades.

No one has a solution for the very real problem of modern media monetization, but Murdoch’s suggestion is worse than most. Publishers lost the last few rounds by clinging to the past, they’re not going to win the next one or even force a draw by doubling down and making empty threats with non-existent leverage.

You can read Murdoch’s full statement below:

Facebook and Google have popularized scurrilous news sources through algorithms that are profitable for these platforms but inherently unreliable. Recognition of a problem is one step on the pathway to cure, but the remedial measures that both companies have so far proposed are inadequate, commercially, socially and journalistically.

There has been much discussion about subscription models but I have yet to see a proposal that truly recognizes the investment in and the social value of professional journalism. We will closely follow the latest shift in Facebook’s strategy, and I have no doubt that Mark Zuckerberg is a sincere person, but there is still a serious lack of transparency that should concern publishers and those wary of political bias at these powerful platforms.

The time has come to consider a different route. If Facebook wants to recognize ‘trusted’ publishers then it should pay those publishers a carriage fee similar to the model adopted by cable companies. The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services. Carriage payments would have a minor impact on Facebook’s profits but a major impact on the prospects for publishers and journalists.

Featured Image: Drew Angerer/Bloomberg/Getty Images