Facebook has decided it’s better for them and their users (mostly them), if more of the content it serves comes from within its own application, and it has profoundly bad implications for local media companies. According to the New York Times, Facebook is in discussions with the Times, Buzzfeed, National Geographic, and likely many others downstream.
To make the proposal more appealing to publishers, Facebook has discussed ways for publishers to make money from advertising that would run alongside the content.
Facebook has said publicly that it wants to make the experience of consuming content online more seamless. News articles on Facebook are currently linked to the publisher’s own website, and open in a web browser, typically taking about eight seconds to load. Facebook thinks that this is too much time, especially on a mobile device, and that when it comes to catching the roving eyeballs of readers, milliseconds matter.
Let us not forget that this is the same concept that drove AOL to the top long ago, and the result was costly. I’m not suggesting Facebook will collapse, but nobody thought AOL would collapse either, certainly not Time Warner. It’s a business decision, however, that Facebook will likely regret, because tightening the walled garden noose disincentivizes those whose necks are on the line. We’re in the age of free range content, that which is allowed to wander wherever its consumers wish, and this smacks of yet another attempt by a major corporation to put people back into a cage of some sort.
Facebook mistakenly thinks that speed of access to content is a sufficient price that users will pay for their attention to ads and sponsored content. This is same reason the company wants viral or personal videos loaded into its own video player instead of, for example, YouTube’s, and why it has launched its own internal browser. Speed of access is certainly a problem, but it’s one that could be solved easily if media companies were to fully embrace responsive design.
Ten years ago, when I published The Remarkable Opportunities of Unbundled Content, I made the incorrect assumption that local media companies would pay attention and act on those opportunities. But let’s face it; these companies have every reason to hang onto their old model of doing things rather than dealing with the cost of reinvention. Besides, with few exceptions, corporate executives are unable to take up the study of models disrupting their own, much less embrace entirely new business dynamics. Hence, this entire series of essays — which is all about reinventing local media — has been mostly an unintentional exercise in parroting or filling the minds of those who would challenge media’s anachronistic practices. That’s a shame.
In the early days of Borrell Associates, Gordon Borrell also studied disruptive innovations, saw a clear path for local media companies, and began his Johnny Appleseed quest to help companies move forward in advance of the storm. He told me it didn’t take too long before he realized that, while many managers agreed with him, they could never follow through.
“The path was very clear,” he said, “and we did see some great success stories, so I started firing clients who maintained a tightly integrated model whereby their core-product managers were also in charge of managing disruptive media products. That, of course, never works.” Managers and companies aren’t “dumb,” he added. They’re just not able to change fast enough.
Change is nearly impossible for companies gridlocked by a longstanding business model and resultant cash flow. That’s why it’s so important to create a separate unit that tackles the new, disruptive opportunity outside the gravity field of the core product. Yet many companies still believe in convergence, and in having one staff selling multiple competing products.
I think it goes beyond that, but Gordon is right. He’s a student of Clayton Christensen, who wrote the book on disruptive innovations and says exactly the same thing. The offspring must have permission to destroy the mother, and that’ll never happen with the same people running both.
Meanwhile, the things of which I wrote long ago have come to pass, although it’s pureplay web companies from Silicon Valley and beyond, like Buzzfeed and many others, that have embraced the ideas and are now sucking billions from local communities in Everywhere, USA. These companies have been initially funded by venture capitalists, those with cash to invest who are able to see past the corporate demands of quarterly reports. VCs exist, because there are “problems” that can be solved through creative thinking, technology and seed money, the quantity of which depends on the length of the runway required.
Problems, you ask? What problems? Isn’t media capable of taking care of its own problems? Well, yes, but the “problems” that venture capitalists are helping to solve are all on the consumption side of media, and this is a significant barrier for companies that place well-developed and company-centric models over audience needs, one example of which is turning one-third of prime time into ads. These businesses need to keep things just as they are, and the result has been a technology-enabled audience stampede away from traditional forms of media, one that is growing and gaining speed with each passing day. The central “problem” has become the high cost of consuming legacy media products, from dollars and cents to the value of a person’s time. It isn’t about the value of anybody’s content; it’s about the value of its consumers.
I had a conversation the other day with a 31-year old working wife and mother who typifies young people today. She told me she has a TV and cable but “never” watches it. She has cable, because her family gets a better deal on the Internet as part of a package. They do not, however, have the cable box hooked up. They use the TV for Netflix and YouTube, and this is the way their 8-year old daughter is being raised. I asked if they watch emergency weather during storms, and she shook her head “no.” She gets all the information she needs online. She admitted to not being up on current events, but when I asked her about particular news items, she knew all about them. She gets her news from friends via links on Facebook, Twitter and elsewhere. When it comes to the 2016 Presidential election, that’s where she’ll turn for information. It is, she said, the annoyance of all those ads that pushes her away from broadcasting and cable and into the arms of disruptors trying to solve her problem. “If Netflix ever runs ads,” she said, “I’ll find some other way.”
Enter Facebook. Media companies view Facebook as a marvelous traffic generator for media websites. Data records of most companies show Facebook to be the top referrer of users, or at least one of the top. This has resulted in strategic and tactical efforts to “encourage” Facebook followers to click on videos, images, stories, or links provided by media companies using Facebook. We’ve even discovered that Facebook can be used to actually get people to tune into the news on TV. However, what Facebook is in discussions to do would eliminate all or most of that over time. Felix Salmon says that has the potential to actually kill news brands altogether.
The era of the self-contained news package — all the news that’s fit to print, delivered neatly in a bundle on your front doorstep in the morning — is coming to an end. News has become disaggregated, and the thing that people share is not the newspaper, but the news story. Which can come from anywhere…
…the downside is potentially enormous. It’s not just about losing website traffic from Facebook, although that’s a huge worry for sites which sell millions of dollars’ worth of ads against those pageviews. It’s also about losing control over exactly how your content is presented and delivered — about losing most of the things which make your news brand memorable and unique.
“Free Range” has developed into mostly a marketing term to help sell (usually more expensive) chickens, but it’s an appropriate metaphor for the consumption of media today. Rather than be cooped up in cages, it’s more natural for people to go about their lives and consume media where, when and how they can. Yes, it’s a choice, but we always miss reality when we assume there’s nothing behind these choices except a desire to consume content. People are busier today than they’ve ever been, and time is the new currency. Again, this is the problem that innovation is solving. It’s the prime directive of the Internet, where everyone is just one click away from everybody and anybody else. This paradigm is blowing away ancient systems of order, but it also provides unlimited opportunities for businesses that will embrace it.
Companies like Facebook, Tumblr, and others who wish to bring everything inside their own networks are following in the footsteps of America Online. Will they one day have to pay the AOL price? Will Facebook one day be disrupted? That’s impossible to predict, but people flee walled gardens, because the Net allows them to do so, and once the trapped human soul discovers the fresh air of freedom, it’s impossible to push it back inside an old cage.
If we truly wish to be a part of this downstream, it begins with allowing our content to range freely today.