Facebook and media: Show me the revenue!

After the Facebook announcements yesterday at its 2011 f8 developers conference, I’ve been trying to find the revenue model for the media apps. Will Facebook share revenue? Is this just a traffic driver? This is especially a concern if the audience never has to leave Facebook to read stories. How will these news organisations capture the value from the Facebook audience? I’m not finding many answers.

AdAge has a great story answering some, but not all, of these questions, but the answers should raise alarm bells for news organisations struggling to monetise their digital content. “Stories don’t link out to the publisher and can be read within Facebook.” So, will Facebook be paying for this content? Will news organisations now be counting Facebook impressions in their traffic stats? Will news organisations be able to sell ads against their content in Facebook? If that is the case, then Facebook will obviously want a cut of this.

Revenue models seem either non-existent or not well thought out.

When asked about the revenue model for Social Reader, a Washington Post spokeswoman said, via email, “The focus right now is on getting people to use it.”

What? You’re joking right?! At least the News Corp spokesperson said that there might be some ad support and it would tie into other apps. Clear Channel wouldn’t comment on the revenue model for its iHeartRadio app.

Simply getting eyeballs isn’t enough in 2011, and the lack of detail about how these news organisations plan to capture revenue from these apps to support journalism is very, very worrying.

9 thoughts on “Facebook and media: Show me the revenue!

  1. “engagement” is rapidly becoming the new “eyeballs” – something people are chasing without any clear sense of how that will lead to revenue at any point.

    I’m sure this new style of Facebook content app CAN be used in a business-like way (and have some ideas in that direction myself) – but some of these apps look like handing even more of your business straight over to Zuckerberg.

  2. Amen, Kevin! I was thinking the exact same thing. Now the free radicals of my org will be arguing once again how it’s the road forward to give everything away for free – even if it’s not. I seriously don’t understand anybody can still be so stupid as to suggest that traffic in itself means anything, if there isn’t dollars in the coffers attached to it.

    What media companies need is to develop transaction strategies and not traffic strategies.

  3. Exactly Adam. I can understand using the Facebook platform to increase engagement on your site. I can understand media organisations having a Facebook page, but this seems either 1) completely desperate or 2) completely stupid. Are news organisations so scared of Google and pissed off with Apple that they willing to hand over this much to Facebook?

  4. Isn’t it funny how news sites got their panties in a bunch about other people, e.g. bloggers or Google News, “using” their content, but are delighted to give away page views and thus ad revenue to Facebook. WTF are they thinking?

  5. Mads, this is worse than an ad-supported “free” model. Look at what the Washington Post is saying, revenue is not a priority at launch. What? This goes well beyond the paid versus ad-supported argument. Ok, I can understand with any new launch, you think about building audience, but you have to have at least some thought, some strategy about how you’ll monetise that audience once you have it. In 2011, news organisations should at least pay some lip service to building a sustainable business. That’s what is so worrying. I can’t believe that the media companies would do something that handed over so much opportunity to Facebook without some return, but I’m not hearing anything about the monetisation mechanism for anyone apart from Facebook. Shocking.

  6. Kevin, I actually think media companies by and large are that stupid. They have learned nothing from the last 10 years, because it’s still – in a lot of places – digital illiterates with no commercial background calling the shots. I honestly do think that a transaction strategy is the way forward – that what really matters are the customers who buy something from you and browsers become largely irrelevant.

  7. Mads, no argument here over transaction businesses. Fairfax in Australia is building a great transaction business. The Schibsted miracle in Scandinavia is built on the strength of its classified/auction business Finn. As for the folks calling the shots, yeah…the bruises from banging my head against a wall have now healed since I went independent last year.

  8. Rodrigo, the WSJ app launch pre-dated the announcements at f8, and I’m not certain what relationship its app has with the new media apps. Regardless, the WSJ has always been focused on revenue. This is a continuation of its strategy, and it’s always been an outlier in terms of news organisations and having a revenue focus. More news organisations should give revenue a bit more thinking. Thanks for the link.

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