While Meta wants to be a maverick in the tech space with its whole metaverse concept, the company seems to want its most prominent social media platform to be a lot more like other existing apps.
Meta, the parent company of Facebook, doesn’t seem to think its current deals with news publishers are working out too well for the tech giant, according to a Wall Street Journal report Friday. For those biggest news organizations that get paid by Facebook to host their news articles, it could result in a loss of millions of dollars, unnamed internal sources told the Journal.
The sources said that Mark Zuckerberg’s Facebook wants to instead focus on getting a bigger piece of the pie for the short-form video format currently dominated by TikTok, the app that’s making tons of money as one of the most popular apps in the social space. On the other hand, Facebook’s first quarter results showed the company had been losing users for the first time in its history.
Those unnamed sources said more money goes out to the biggest news companies that also have paywalled content. The New York Times is getting paid $20 million annually to host its articles on Facebook News. The Washington Post gets $15 big ones while the Journal is making $10 million. The three-year payment deals with each publisher were inked in 2019, and they’re set to expire this year.
A spokesperson for Facebook declined to comment on the Journal’s reporting. The Meta representative also pointed to Facebook’s Reels format that’s trying to incentivize creatives onto the platform in a TikTok-like manner.
Facebook is just one of many social companies flinching before the sting as they anticipate regulation that may force tech companies to pay for news content hosted on their sites. Last year, Australia instituted a rule that required companies to pay publishers for their news, and in response Facebook removed its news feature for Australians. That one act caused chaos not just with news, but hospitals and fire services as well, and reports said that was deliberate. Meanwhile Google recently announced it was penning new agreements with news publishers in the European Union in response to new regulations from the bloc. Zuckerberg seems much more hesitant to agree to those kinds of forced terms.
But what about this refocus on video? For those who were there in publishing during the mid 2010s, the idea is already leaving a taste of bile in their mouths.
Battlestar Gallactica’s arch words “All this has happened before. All this will happen again” have never stopped being relevant, but in the case of Meta and Facebook, it seems increasingly prognostic. The Journal’s report mentions that the company wants to shift away from news and try to edge toward short-form videos ala TikTok. It’s never a good sign when a company that once pushed the bounds of social media now needs to play catch-up in the hunt for that sweet video-based ad revenue, but it’s also not the first time the company has tried a similar move.
Back in 2015, Facebook was just one company to promote a so-called “pivot to video” that had publishers focusing on short-form videos rather than traditional text. Companies that refocused their efforts on videos displayed mostly on social media later witnessed a severe drop in page views. Sites all across the board like Mic, Vox, Buzzfeed, and Cracked experienced large-scale layoffs as it became clear that Facebook didn’t understand its own metrics for how long users spent watching videos on its platform.
Despite this try-fail-try again attitude, Facebook seems to be gunning for TikTok. Zuckerberg’s company had reportedly hired an outside firm to poison the well of public perception against their competitor. As stated before, Meta otherwise wants to woo TikTok creators over to its platforms on Facebook and Instagram by promising to pay them for live streaming or otherwise promoting themselves on the platform.
Meta officially retired the Facebook (FB) ticker for its stock Thursday, but not many investors seem ready to go all in on “META.” An article by Bloomberg Thursday shared that investors are lukewarm at best on Meta’s conception for the metaverse.
Most tech companies are not doing too hot through the first half of 2022, but Meta has suffered in particular. Meta’s shares are way down past 40%, and as Bloomberg points out, the Roundhill Ball Metaverse ETF, the largest fund for the metaverse, is also way down from its 2021 peak. Other metaverse funds are faring similarly.
Investing consultants told Bloomberg that there’s a lot of skepticism of whether the metaverse will really take over social media as has been promised since the company changed its name last year.
Other tech personalities have not been quiet in their disparagements for the metaverse. Some have said they don’t see the purpose of the technology, or else considered there’s no consensus for what the metaverse even is. What likely hasn’t helped Meta’s stock price is a new wave of turnover for its metaverse projects.