Memo to Magazine Media: Social Networks Are Not Altruistic
Social media doesn’t exist as a grand platform for your experiments. It exists to make money for its owners.
Who made Facebook and other social networks the kings of the media-consumption universe?
I get that a mind-bogglingly large number of people use those platforms. I get that they've changed media-engagement behavior forever. What I don’t get is why media companies have ceded their audiences, and offered their content for free, to social networks—all of which are individual companies, in business to generate a profit, each of which has its own zero-sum business objectives.
Just in the last couple of days, headlines describe the relationship:
From the INMA newsletter: “Facebook penalizes click-bait in feeds”
There’s an implied power in these headlines. Facebook in 2016 and for the foreseeable future is the de facto arbiter of media consumption. It decides what gets seen and by whom, and it decides on your relationship with your customer, at least on its platform, which at the moment is colossal — culturally and economically dominant.
For all the “smartest-people-in-the-room” posturing of some media-company executives, there’s something unexplainable about why you’d turn over your content unconditionally and free-of-charge to giant social-media companies, which are generating billions on it.
Note to magazine-media executives: Social media clearly is a fabulously innovative 21st Century town square, but it’s not altruistic. It doesn’t exist as a grand platform for your monetization and audience-engagement experiments. It exists to make money for its owners, and that money is coming out of your revenue and from your content.
Look at it another way: You hire the best talent in the world, pay that talent a lot of money to generate great content, and then give it to another company, free. You enhance the other company’s audience experience, and you know that the other company is selling massive amounts of advertising against your content, while you’re hoping to monetize the traffic from clickthroughs. What's more, in doing this, you're also making yourself too dependent on a single source of traffic, vulnerable to that company's whims. Terrific.
I acknowledge that most media-company executives see social media as a barter arrangement: The social network gets content, and the media company gets reach. But my whole argument is that publishers aren't assessing the true value of that reach, and whether the terms of the barter are equitable for both sides. I acknowledge as well that there are many media companies and just one Facebook. For the vast majority of magazine-media companies, Facebook couldn't care less whether they post their content to Facebook. Given that reality, it's not surprising that most magazine-media companies see more upside than risk. But if several large companies — newspapers, magazines, television — started asking questions, or their industry associations did, then the dynamics might shift.
In 1846, the founding of the Associated Press marked the beginnings of the media syndication business. In the decades immediately after that, competitors emerged in the newspaper business, and in the 1880s, Samuel McClure, the founder of McClure’s Magazine, established a syndication network for magazine writers and book authors. Variations on this model have been used ever since. It’s in print (AP remains the main news agency in the U.S., but there was also the old UPI.) It’s in television (simulcasts or reruns on local stations). It’s in radio (syndicated broadcasts or royalties that stations pay to artists every time they play a song.)
In the 2000s, the courts recognized that large-scale peer-to-peer music sharing networks like Napster, LimeWire and Kazaa were piracy, infringing the copyright of the music creators. In this decade, artists have pushed back against streaming-music models like Spotify, claiming that such services grossly underpay content creators. Even YouTube pays royalties on content. In these and other present-day models, the content creator is recognized as the essential part of the economic ecosystem.
So why is it different in social media?
It’s time for magazine media to rethink why it’s effectively giving away its content to giant social networks that are getting fabulously rich because of that free content. It’s time for magazine-media companies to start asking for appropriate compensation from social-media companies for the use of their content. Perhaps there's a valuable role for the industry associations — Connectiv and MPA — to start gathering ideas, advocating, and engaging individual stakeholders for the good of all.
The basic rights-and-royalties model has existed for 130 years. It provides a relevant place to start the conversation.