Facebook's Subscription Plan Gives Publishers Hope at Last

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Credit: Illustration by Tam Nguyen/Ad Age

Facebook's plan to let publishers sell subscriptions on its platform is renewing some of its media partners' optimism about their future together.

Campbell Brown, head of news partnerships at Facebook, confirmed at an industry event this week that the social network will let publishers set up paywalls on the content they publish using Instant Articles, which let Facebook users read without actually visiting publishers' sites.

Publishers will still be able to serve ads behind the Instant Articles paywall, according to a person familiar with the program.

"Instant Articles are highly trafficked and users prefer the format," said one publishing exec from a company that soured on the Instant Articles program. "The problem is the monetization has been inadequate."

Instant Articles load quickly by keeping readers inside the social network instead of directing them to outside websites. The trade-off for participating publishers, of course, is the loss of traffic. And the ads that Facebook delivered to Instant Articles often didn't match the revenue that publishers could get on their own sites.

Publishers such as Hearst have pulled back from the program this year because it stopped making sense monetarily.

But the pendulum might have begun swinging back even before this week's news. Several publishers, speaking on condition of anonymity, said they are rethinking their decisions to pull back on Instant Articles because they have seen traffic drop on the social network. The economics of the program might be more favorable than they realized, they said.

On Wednesday, Facebook even introduced new tools for publishers to compare how well their content performs on Instant Articles and on the mobile web, which could help convince more media partners to stay involved.

Facebook has said Instant Articles generate 20% to 50% more traffic than articles that drive readers to the mobile web. The articles also receive more attention in the Facebook News Feed. While Facebook says it doesn't manipulate the ranking, it says, the format is more popular and therefore winds up in more people's feeds.

The advantages of Instant Articles keep publishers from entirely abandoning the project. There also are media partners concerned by the growing power of Facebook, and they're afraid if they don't play ball, they'll be relegated oblivion on the social network, where 2 billion people go for news every month.

Facebook isn't the only digital environment where publishers are struggling to find a magic formula for success at a time when content is becoming more commoditized and less profitable. Historic publishers like The New York Times and Washington post are trying to reassert the value of their journalism, steering digital readers to a place many haven't been before: comfortable paying for news online.

That's why Facebook told publishers at the event in New York about the subscription payments plan. Details are still to be worked out, but here are a few keys points, according to a person familiar with the program: Publishers would control the relationship with the reader, and the data that comes with it; payment details are still being determined; and publishers would offer at least 10 articles free to each reader before hitting a paywall.

That last part may be a sticking point for publishers that want readers to pay sooner.

"It's good if Facebook is actually helping to forge direct relationships between their audience and the news brand," said Jason Kint, CEO of Digital Content Next, a publishing trade group.

Facebook and Google control almost half of all digital ad spend worldwide, and their media power has made them gatekeepers of information. Facebook has long been committed to a free model of distribution, so charging for content will be a departure.

"It may be antithetical to how Facebook operated its business historically," Kint said. "But it creates more incentive to get publishers comfortable putting all their content inside Facebook's closed platform."

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