Instant Articles, one of Facebook Inc’s (NASDAQ:FB) prime weapons in the fight for online dominance against Google Inc (NASDAQ:GOOG), was launched earlier this week. The New York Times is one of the nine companies that signed onto the initial program. Advertising will be shared between Facebook and the publishers according to the terms of the deal.
But who owns the news? If you read Instant Articles and Facebook Inc (NASDAQ:FB) collects ad revenue, does that make it their information? If they share that revenue with the New York Times Co. (NYSE:NYT) is there a shared ownership of the news as a commodity?
New York Times won’t rely on Facebook
It’s the relationship with readers that matters, according to Cain Miller. “No news organization, despite being grateful for the readership from Facebook, wants to become too dependent on the network, or give up its own relationship with readers, she wrote.” The main reason for that is the unreliability of “fickle” algorithms.
Keeping New York Times articles on Facebook takes a lot of the publisher’s power away. The lack of a home page, or a paper front page, means that a newspaper like the NYT is no longer a “collection of stories,” it’s a host of orphans floating freely on Facebooks’ platform. That reduces the ability of publishers to brand their content, and could have dramatic consequences when those fickle algorithms change.
The future of the News
Analysts are excited about Facebook’s ownership of the medium, but they haven’t addressed the company’s ability to control the message. A recent Morgan Stanley report lauded Facebook for its speed in catching up to Google on incremental ad spending.
Benjamin Swinburne and Brian Nowak, who authored that report for Morgan Stanley, said that a “move toward branding” in online advertising is driving results at Facebook. The news has always run on advertising, but there has never been a newsstand cabal with power over what news people are likely to see and buy into.
With Facebook ascendant and no Supreme Court case on the ownership of news content, and the right to have it be seen, on the cards, it is the Menlo Park company that will ultimately decide the direction of this battle.
The only counterweight is likely to be popular opinion, and it has worked in the past. The New York Times may try to harness that populism, but relinquishing control on the medium makes the message flaccid.
As Mssrs Swinburne and Nowak of Morgan Stanley and the NYT’s