In fact, though it was not expected from publishers like the New York Times, Facebook Instant Articles are becoming more and more popular, being embraced by the most serious publishers as part of their Innovative Marketing strategy. Some key figures about content licensors in digital media.
Old versus new media
Netflix will pay approximately $3 billion in licensing and production fees this year to the television and film industry; Hulu is paying $192 million to license South Park; while Facebook is free like it is the case for a variety of publishers like the New York Times, BuzzFeed, and the Atlantic, which are posting articles in its new ‘instant articles’ feature.
Digital content is broken up into a profitable high-end entertainment world, where licensors receive a negotiated fee for allowing the distribution of their property, and a low-end publishing world where content is expected to be “free", supporting itself on often-intangible advertising sales and ad splits. In this particular deal, publishers can sell ads on their articles and keep all of the revenue, or have Facebook sell ads in exchange for 30 percent.
One serious question is how this irregular division in the media business came to pass. The more immediate question is about whether Facebook’s instant articles and other republishing initiatives are digging a deeper hole for publishers or helping them get out of the one they are already in.
The rise of Facebook Instant Articles
At the time the Facebook instant articles deal was first proposed, it was not a question of financial exchange. From Facebook’s point of view, it was just a further service to users and publishers. If it hosted the Times’ content it would load faster, hence providing a better experience for Facebook users clicking to a shared Times story. The Times and other publishers should do this, Facebook reckoned, because it would get them greater exposure to Facebook’s vast audience. It was promotional.
After some limited pushback from the publishers, the deal now is similar to a conventional digital ad split—of the kind made omnipresent by Google AdSense. That is, if Facebook sells against this content through its networks, it splits the revenues with the publisher. If the publisher sells the ad, as though in a free-standing insert model, it keeps what it kills.
And, indeed, it’s a model that, on this monetization basis, might work to BuzzFeed’s advantage. In a sense the instant article arrangement means BuzzFeed has cadged free space and free audience from Facebook, which it can sell back to clients sponsoring its content. This can work particularly well for BuzzFeed because it is not just an editorial organization, but as effectively as an ad agency. It strategically and smartly walks the fine line between editorial and promotion. Varieties of print publication categories, like travel and fashion, have of course long straddled this line. And that works just fine for both BuzzFeed and Facebook.
More on: http://www.technologyreview.com/news/539066/facebook-instant-articles-just-dont-add-up-for-publishers/?utm_campaign=newsletters&utm_source=newsletter-weekly-mobile&utm_medium=email&utm_content=20150713