Facebook has announced plans to launch a new subscription product for publishers allowing users to read up to 10 articles before a paywall intended to persuade users to join a paid subscription. iProspect investigates.
Firstly, will this benefit publishers?
Allowing users to read up to 10 articles before subscribing will direct them through an extended consideration stage that might result in the purchase of a paid for subscription. The key benefit for publishers here is that Facebook now offers them a way to directly monetise their content without rerouting the audience through an external paywall. Removing this kind of friction makes it easier to access content.
Will anyone pay for the service?
The quality of the content will ultimately be the deciding factor in whether people will be willing to pay. We already know that when people identify a piece of content as having depth, they are more likely to reward publishers with paying for it. Certainly it will help that publisher content embedded within Facebook’s sharing tools enables users to engage with friends and family whilst being exposed the latest news within one platform.
A limitation of this service is the metered paywall that requires users to sign up to the paid subscription, however this is a one-time only action. Another risk here is that due to the wealth of information users have access to 24 hours of the day through various channels results in users digesting nuggets of content throughout the day rather than longer dwelling times over content.
Which consumers are most likely to take advantage of the new service?
We think that there will likely be a positive correlation between adoption rates and age. It isn’t essential to pay for news, so it will likely be most appealing to those with more disposable income. Adoption will also be largely content driven, i.e. it’s the topics and the audience it attracts that will drive subscriptions.
Why now? Shouldn’t Facebook have launched this way back?
Perhaps not, because any subscribe only model offered at an earlier stage in Facebook’s history would likely have been considered a major disruption. This product launch shows that Facebook want to grow their business and stay competitive with the likes of Google and other news content focused platforms. Effectively, what we are seeing is Facebook’s reaction to a plateau in its growth. It makes sense that they would want to invest in increasing dwell times on its platform through original content or cooperating with publishers. Publishers need to monetise and Facebook need to increase dwell times to serve more ads. This challenge may only now be being addressed by Facebook, but they have consistently shown that they evolve and learn from what their users want and need.
Is Facebook about to become a fully-fledged media owner?
Facebook are already a fully-fledged media owner; not a platform. With this launch, it appears that Facebook are taking advantage of publishers’ need to effectively push their content in front of Facebook’s extensive user base. This provides Facebook with an opportunity to transition into a space where users not only interact with other users and brands but also consume the world’s news. Facebook now has the chance to strengthen its position as a media owner by enabling news publishers to deliver their content to users through the Facebook platform.
Recently, publishers including the WSJ & NYT requested that Facebook & Google review their business model solutions to secure the long-term availability of local journalism - including a “fair share” of revenue and data, subscription models and protection for publishers’ intellectual property.
What does Facebook need to do in the long-term to secure their trust?
Truthfully, when it comes to business Facebook does not need to secure their trust, they are doing quite well without them! Years ago, most of the publishing industry decided that giving content away for free was the preferred business model, but today many wish they could renege on that decision. Ultimately, publishers, whilst nice to have, are not business critical to Facebook’s progression. As it stands, Facebook is worth ten times more than News Corp or NY Times – realistically, if they wanted to move into this space, they could just purchase an existing publisher. Facebook’s focus is rightfully on original content.
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