Facebook is finally letting publishers build paywalls inside Instant Articles, but only on Android phones.
On Thursday, the social network announced its latest remedy for publishers that while able to tap into large audiences on Facebook, are afraid to give away their content too cheaply. The paywall plan, being done in partnership with a small group of publishers including The Los Angeles Times, Hearst, The Economist and The Washington Post, lets publishers cut off non-subscribers after reading a certain number of Instant Articles, which are the fast-loading posts Facebook developed especially for media partners.
Some publishers that believed the economics of Instant Articles weren't working in their favor had lost interest in them, including Hearst. Now, two of Hearst's flagship newspapers, The Houston Chronicle and The San Francisco Chronicle, will test the paywall option.
The threshold is 10 articles to start. Other levels will eventually be tested, Facebook said in its announcement on Thursday. Facebook also said that only Google Android devcies would support the paywall, at least for now.
Apple is resisting the program because it demands a split of in-app revenue, and it couldn't come to terms with Facebook on how to categorize these transactions, according to people familiar with the impasse. In short, Apple demands a cut, and Facebook arranged the program to funnel all proceeds to publishers becasue it thinks the revenue should qualify as coming from the mobile web not in-app.
Facebook declined to comment for this story.
"Many publishers identified subscriptions as a top priority, so we worked with a diverse group of partners to design, refine, and develop a test suited for a variety of premium news models," Facebook said in its announcement. "We also heard from publishers that maintaining control over pricing, offers, subscriber relationships, and 100 percent of the revenue are critical to their businesses, and this test is designed to do that."
The readers who hit the paywall will see a subscription link to the publisher's website, and the publisher will keep all the revenue from the sign-up, Facebook said. The Instant Articles also come with ads even for paying subscribers, according to people familiar with the prorgam.
Facebook launched the Facebook Journalism Project earlier this year to deal with publishers' issues on the platform.
Facebook said it was testing other options, as well, such as a subscribe button that appears before hitting the paywall, and replacing "Like" buttons at the tops of stories with "Subscribe" buttons.
Facebook said publishers are seeing 50 percent more revenue per post on Instant Articles than this time last year. Also it updated its audience network numbers, saying it generates $1 million a day for publishers that use the ad-serving platform.
