- Facebook (NASDAQ:FB) is going to be spending at least $1 billion on licensing content from news publishers over the next 3 years. These are the details.
Facebook (NASDAQ:FB) is going to be spending at least $1 billion on licensing content from news publishers over the next 3 years. This initiative comes at a time when tech giants are facing pressure from governments for fairness around content distribution.
The $1 billion investment is in addition to the $600 million that Facebook paid out since 2018 to publishers such as Guardian and Financial Times for content being distributed in the Facebook News section. This initiative was announced by Nick Clegg, VP of Global Affairs at Facebook, in a company blog post.
In the company blog post, Clegg explained why Facebook decided to stop the sharing of news on its service in Australia. But that matter has been resolved by Facebook’s decision to partner with publishers.
“When ads started moving from print to digital, the economics of news changed, and the industry was forced to adapt. Some have made this transition to the online world successfully, while others have struggled to adapt. It is understandable that some media conglomerates see Facebook as a potential source of money to make up for their losses, but does that mean they should be able to demand a blank check?”, wrote Clegg. “That’s what the Australian law, as it was proposed, would have done. Facebook would have been forced to pay potentially unlimited amounts of money to multi-national media conglomerates under an arbitration system that deliberately misdescribes the relationship between publishers and Facebook — without even so much as a guarantee that it is used to pay for journalism, let alone support smaller publishers. It’s like forcing car makers to fund radio stations because people might listen to them in the car — and letting the stations set the price. It is ironic that some of the biggest publishers that have long advocated for free markets and voluntary commercial undertakings now appear to be in favor of state sponsored price setting. The events in Australia show the danger of camouflaging a bid for cash subsidies behind distortions about how the internet works.”
Google made a similar deal with publishers in October 2020 as well. In Google’s case, it is going to pay certain publishers for the right to highlight content in story panels displayed in the News Showcase product.
