Just like Facebook, Google is also building tools for news publishers that will help them boost subscriptions. Will the efforts taken by these tech platforms give a new lease of life to news media companies? Shashank Venkat finds out
Close on the heels of Facebook
, search engine giant Google has also announced plans to develop tools that boost subscriptions
for news publishers. This would come as a huge relief to the publishers as they have been at loggerheads with these popular digital platforms over a fair revenue sharing mechanism. Amidst dwindling advertising revenues and the duopoly of Google and Facebook on news distribution, the industry has been struggling to find ways to boost revenues. From that perspective, a new model where paid subscriptions are offered through Google and Facebook may not be such a bad move on part of these publications.
According to a Bloomberg report
, Google’s approach will involve a revamp of the ‘first click free’ program that allows users to access articles to content from subscription publications. In addition, Google is also trying to figure out tools for subscription management
to enable smooth online payments. This in turn will bring more users and content creators to the web, enabling Google to feed more data into its cash cow – digital advertising.
On their part, both Google and Facebook are doing their best to build products and tools specifically tailored for publishers. Google is developing Accelerated Mobile Pages (AMP) which allows websites to load more quickly within search. Facebook, on the other hand, is exploring subscriptions within its Instant Articles platform for publishers.
It will be interesting to see the approach Google takes when it comes to revenue and data sharing. Facebook has categorically stated
that it will allow publishers to keep 100 percent of the subscription revenues and subscriber data. For the moment, Mark Zuckerberg and his team seem to be solely focused on getting more users on board, increase engagement rates and monetising these users by showing ads. Facebook gets enough user data when they sign up on the platform and it doesn’t really need additional data from the news subscribers to serve ads.
The Facebook approach is in stark contrast to other leading platforms like Apple that sell subscriptions through the App Store and the Apple News app and take away 30 percent of the profits. Whether Google will go the Apple way or the Facebook way remains to be seem, but we think that the tech giant will prefer the latter since its core objective will be to increase its share from digital advertising.
These developments are an indication that publishers see subscription-based models as the lifeline for their industry. That being said, there is no one-size-fits-all approach when it comes to subscriptions. While Google is testing its new tools with The New York Times and Financial Times, some publishers have preferred to use their own subscription paywalls. The Wall Street Journal (WSJ) and Bloomberg
are notable examples. These publishers are worried that Google may dump these paid news sites lower in their search engine rankings if they do not sign up for Google’s new offering. Earlier in February, WSJ saw a huge dip in organic visitors
when it opted out of Google’s ‘first click free’ program.
Will Google and Facebook allow paid news publishers a level playing field? Or will they give an unfavourable advantage to publishers signing up for their platform? This will be a tricky space for the tech giants to handle as the government tightens the noose on them.
Only recently, we saw US President Donald Trump going all out against Amazon
and the White House seems to be in no mood to relent
anytime soon. The tech companies have already earned the ire of the Trump administration as they seek to bring these businesses under the purview of a privacy regulator. Trump has also voiced his opinions against Facebook and Google’s efforts to manipulate their news feeds promoting liberal views and stifling conservatives. The President is also strictly opposed to the social bubbles (echo chambers) created by Google and Facebook where feeds are personalised based on past social engagement and there is little room for opposing views. In addition, the Republicans and tech businesses are at loggerheads over the proposed rollback of Obama-era net-neutrality rules
In that sense, there may never have been a better time for publishers to get a good bargain from these tech companies and pivot towards newer revenue generating mechanisms. That being said, publishers need to re-orient their traditional mindsets as well. Instead of trying to fight the digital tide which is completely on the side of Facebook and Google, it makes more economical sense to explore mutual synergies with them. These technology partnerships will also give media companies access to smoother subscription management platforms built on top of a robust infrastructure and readymade user networks, free of cost.
Of course, the fate of such alliances will ultimately be determined by the subscribers. Will users pay for content that they are used to getting for free? Or will Google and Facebook change the game for the news publishers? Only time will tell.