As Canada considers implementing a new, mandatory process that would force Meta and Google to negotiate commercial deals with local news publishers, as payment for benefiting from the use of their content within their sites and apps, Meta has shared a new report which shows that Meta doesn’t need news publisher content anywhere near as much as the opposite is true.
According to a new report by NERA Economic Consulting (which was commissioned by Meta):
“News content from traditional publishers is of low value to Meta and declining, while publishers benefit from traffic from social media apps.”
The report found that news publishers glean ‘considerable economic benefits’ from their use of Facebook, with 90% of organic views for news publishers coming from links posted by the publishers themselves, not by Facebook users.
Indeed, according to Meta, interest in news content in its apps has shifted significantly, with many Facebook users now saying that there are too many news-related posts in the app.
Meta CEO Mark Zuckerberg noted the same, in relation to political content, back in 2021, noting that:
“One of the top pieces of feedback we’re hearing from our community right now is that people don’t want politics and fighting to take over their experience on our services.”
That spurred Meta to work on reducing the presence of political content on Facebook, specifically, which also relates to the broader findings here, that users have had enough of divisive, topical content crowding their feeds.
“The proportion of adults using Facebook for news fell by about a third between 2016-2022 from 45% to 30% [while] only 13% of US adults prefer to use social media for news, with 33% preferring television, 23% news websites or apps, 7% radio, and 5% print.”
As such, Meta says that it shouldn’t have to pay for news content, in Canada or anywhere else, because it’s simply not of the value that publishers project, which has spurred misguided regulation on this aspect.
“Proposed government interventions designed to force Meta to provide monetary compensation to publishers based on allegations of market power or disproportionate bargaining power are not thus justified by the available evidence.”
This is not the first time that Meta has used this argument. Back in 2021, when the Australian government tried to implement a similar revenue-sharing structure to benefit local publishers, Meta stated that:
“[The code] would force Facebook to pay news organizations for content that the publishers voluntarily place on our platforms and at a price that ignores the financial value we bring publishers […] For Facebook, the business gain from news is minimal. News makes up less than 4% of the content people see in their News Feed.”
Meta then put its money where its mouth is, by banning Australian news outlets entirely in its apps. That forced a rapid re-negotiation, which eventually saw an amended version of the News Bargaining Code go through, which was more in line with Meta’s thinking.
Yet, even so, the Australian Government has since touted the success of the code, claiming that over 30 commercial agreements have been established between Google and Meta and Australian news businesses, which has seen over $AU200 million being re-distributed to local media providers.
So there is clear precedent for this, and with local news organizations calling on Canadian officials to do more to help them out, you can see why Canada is considering the same.
But Meta’s effectively saying that it can and will ban Canadian news outlets, when push comes to shove, as the impact on its business will be minimal.
“At a time when we face stiff competition and global economic headwinds, our focus is on our core business and responding to what our users want. For most of our users, that’s not news links. Facebook users are increasingly interested in creator-driven content, especially video.”
“We don’t expect to offer new Facebook products specifically for news publishers in the future, because, as this research demonstrates, accessing news is simply not the reason why most people use our apps. Of course, publishers will still be able to post links to their stories and direct people to their websites in the way any other individual or organization can.”
Meta’s essentially saying that it’s not budging on Canadian news negotiations, as it sees no reason to pay for something that it doesn’t need. And with millions in proposed revenue share on the line, Meta will be looking to hold firm, which could indeed see Canadian news publishers blocked, like Australia’s media outlets were two years back.
Of course, publishers won’t see it this way – they’ll call out Meta’s tactics as bluff, as they continue to push politicians to implement the new act. But given Meta’s various moves within its broader cost-cutting efforts, now may not be the right time to test it.
We’ll see what comes next – and it’s interesting to also note the broader shift away from news content, in terms of usage and engagement trends across Facebook’s network.