Meta is distancing itself from the news industry, placing less importance on current affairs and politics on its social media platforms while rejecting government attempts to increase payments to media organizations. Facebook’s parent company is taking a tougher stance towards the sector, shifting its strategy, according to informed sources.
This month, Meta launched Threads, a text-based app designed to rival Twitter. Within five days of its release, Threads attracted 100 million users, connecting profiles to existing accounts on Meta’s popular photo-sharing app, Instagram. The algorithm used on Instagram, which prioritizes content from creators and friends rather than news or politics, has been largely replicated on Threads, as stated by two individuals familiar with the move. Instagram’s chief, Adam Mosseri, has expressed that the platform will not actively encourage news content.
Meta is currently in a standoff with the Canadian government, announcing its plans to remove news from feeds in the region. This move comes as new legislation requires platforms to pay publishers and broadcasters for their content. The law is aimed at supporting smaller news groups with less bargaining power and is also targeted at Google, which has stated its intention to initiate a news blackout. Publishers in Canada who had previous content licensing agreements with Meta have been informed that these deals will end by the beginning of August, according to insiders.
Last year, Meta temporarily removed news from Facebook in Australia during a similar dispute, leading critics to accuse the company of using its influence to undermine a sovereign nation.
Over 30 advertisers in Canada, including the federal, Quebec, and British Columbia governments, have declared their intention to withdraw advertising in protest against Meta’s actions, as reported by Paul Deegan, the CEO of trade association News Media Canada. Canadian revenues accounted for approximately $3 billion of Meta’s $117 billion in annual revenues in 2022.
According to Deegan, “The company is running the real risk of losing more in revenue than what they would pay news businesses under the Online News Act.” He expects other advertisers to join in the coming weeks, resulting in a tipping point that would negatively impact users, shareholders, and Meta’s global reputation.
While Meta has previously shown interest in collaborating with publishers, its senior executives have come to the conclusion that there is a fundamental clash of interests between the social media giant and the news industry. The growth of Meta’s digital advertising business is seen as a key factor in the decline of revenues for newspaper groups worldwide.
Recent shifts in strategy have revealed that Meta’s 3 billion users prefer short-form videos and content from influencers over news and politics. Starting in 2021, the company gradually reduced the amount of political content in users’ feeds. A research report commissioned by Meta and conducted by NERA Economic Consulting found that posts related to current events accounted for less than 3% of Facebook feeds. Approximately 20% of users in the US, UK, and Canada considered the news content on their feeds to be excessive.
The report claimed that “news content from traditional publishers is of low value to Meta and declining,” a statement that publishers vehemently dispute. Publishers argue that news content actually boosts engagement.
These findings partly explain Meta’s increasingly confrontational approach, particularly its opposition to the Canadian law supporting the news industry. Meta stated, “The Online News Act is based on the incorrect premise that social media companies unfairly benefit from news content shared on our platforms, when the reverse is true.” Meta contends that news outlets can leverage social media to expand their audiences and improve their financial performance.
Meta is currently evaluating whether the legislation would require the removal of news links and content on Threads for Canadian users.
Postmedia, a major Canadian news network, has already prepared for a short-term reduction in traffic once Meta’s news blackout goes into effect. However, Andrew MacLeod, the CEO of Postmedia, believes that shaking up the industry could lead to positive outcomes for its future sustainability.
Meta’s decision to distance itself from news comes in the wake of allegations that its inadequate app moderation contributed to discord surrounding former US President Donald Trump’s election and the January 2021 Capitol riots. Sandra Matz, an associate professor of business at Columbia Business School, suggests that Meta’s move to discourage news content on Threads is a business decision aimed at avoiding further scandals related to misinformation and election denial while facilitating moderation.
Mark Zuckerberg, Meta’s CEO, insists that Threads will provide a “friendly” space in contrast to Twitter, which has loosened its moderation since Elon Musk’s acquisition of the platform. Meta has not hired new moderators specifically for Threads and will rely on the existing moderation team from Instagram.
Pinar Yildrim, an associate professor at the Wharton School, notes that news is not as monetizable as other content types such as fashion, which can link to shoppable products. Meta has plans to introduce advertising on Threads.
The defenders of the news industry argue that Meta will ultimately suffer as the divide deepens. Jason Kint, CEO of Digital Content Next, a trade association representing the digital news industry, claims that by eliminating trusted news and the ability to share it, Meta is cutting off its users from the real world. The long-term sustainability of this approach remains uncertain.
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