An interview report in The Guardian with Justin Smith, head of the Bloomberg publishing unit Bloomberg Media, suggests that news and magazine publishers are falling into the same relationship with Facebook as their book publishing brethren have with Amazon. Quoted in The Guardian, Smith claimed that Bloomberg and its peers were “feeding on the scraps” from Facebook’s own ad business, even though their content provided much of the value and interest for Facebook users.
“They keep the $16 billion to $18 billion, they get in the news feed, and the news feed, with personal sharing down, is effectively all of our content, it’s effectively just an aggregation of premium publishers’ content,” he said. “They are at the grown-up table and the publishers are propping it up while being fed scraps.”
While Smith claimed that Bloomberg suffered less than others from this problem because its own model involves different news feeds and is supported by Bloomberg information terminals, he warned that only a few major players could succeed with Facebook volume. “There will be some that achieve such tremendous scale, like BuzzFeed, that will succeed, but that’s going to be one in a million. The rest, I would say, look for the segments, the niches that exist within your current offering, and fragment yourself.”
Given the situation, though, you do have to wonder at Smith’s claim that Facebook is essentially acting as a glorified news channel. His claim that personal sharing is down and Facebook is almost entirely links to news and magazine articles sounds more like the myopia of a traditional media player looking at the platform only from their perspective. You do have to wonder if anyone would bother going to Facebook if that was the only content available – that’s certainly not how I use it, nor most of the users I know. Perhaps the news and magazine publishers ought to be grateful for the crumbs they do get, rather than being shut out of the banqueting hall entirely.
That said, these same publishers also do seem to have hit the same issue that book publishers hit with Amazon: Constrained by their old business models, they have been unable to build direct-to-audience platforms, and are having to reach their customers through savvier and more clued-in “partners.” Maybe if they focused more on building community and buy-in with their audience, instead of reaping ad dollars, this wouldn’t be such a problem? At the same time, book publishers might want to consider his advice on how to deal with Facebook, and apply it to their relationship with Amazon.