While Facebook has a massive audience publishers crave, they simply aren’t making any money from the deal. From Bloomberg:
Newspapers and other media outlets are struggling to make money from their partnerships with tech giants like Facebook and Snapchat, raising concerns over their business models in a news landscape increasingly dominated by social media platforms.
According to industry researchers at Digital Content Next, many content producers aren’t convinced that Facebook wants to help them make money on the platform at all. Some even think that Facebook wants to push them out of the spotlight entirely by hosting all the content itself.
For its part, Facebook has begun allowing publishers to insert their own ads into Facebook Live videos, but for many outlets, the platform will simply will never be lucrative enough to justify much, if any investment in it. Live “has yet to scale or prove a revenue model,” said Digital Content Next.
The silver lining for Facebook here is that Snapchat’s attempts to court publishers have been even more of a failure:
Several media companies have dedicated staff to create content for Snapchat, hoping to reach younger audiences that use it. Yet so far, Snapchat “holds little to no short-term financial interest” for publishers. Snapchat recently changed its model from splitting ad sales with publishers to paying them a licensing fee. The new licensing model “may translate into a limited upside for monetization by publishers,” the report found.
That’s an indication the problem may be systemic rather than an issue with any individual platform. It might simply be the case that publishers will never be able to make money by publishing on social media, and if that proves true, then it’s a major roadblock for growth in our social age.
Facebook Inc (NASDAQ:FB) was trading at $129.67 per share on Tuesday afternoon, up $0.74 (+0.57%). Year-to-date, FB has gained 12.71%, versus a 1.89% rise in the benchmark S&P 500 index during the same period.