Forcing Facebook to pay for news is killing publishers

The Australian Government’s war against Facebook and Google has had its first major casualty: Australian publishers. King Kong founder Sabri Suby argues that the ACCC's strategy will achieve nothing but more news industry tragedies. 

Facebook has called the Australian Government’s bluff, blocking Australian users from reading and sharing news. The decision was made in response to the News Media Bargaining Code, which demands that Facebook pays publishers for news, and was passed through the House of Representatives last night. Facebook’s retaliation was swift and calculated.

Publishers need Facebook, no matter how much they try to persuade us they’re happy being single. Facebook accounts for roughly 20% of most major news websites’ traffic and has always driven a decent volume of subscription revenue. According to The Verge, Facebook claims it generated an estimated A$407 million in referrals for Australian news publishers.

Small publishers need Facebook even more than News Corp, Nine or Seven ever will, and today’s response is the final nail in the coffin for many small and local news businesses around Australia who were already struggling to stay afloat.

In its current form, the Australian Competition and Consumer Commission’s argument doesn’t make any sense. How can you force Facebook to pay for content that publishers voluntarily share on their platforms? Facebook allowed publishers to access more eyeballs, which publishers were able to monetise. Why should Facebook then be forced to pay for providing what is essentially a free advertising service, otherwise known as Facebook News Feed?

Facebook was never going to roll over and accept its punishment lying down. It’s not how it works anywhere in the world, and it definitely wasn’t going to work here. It was always going to fight.

Where do publishers go from here?

How can publishers replace that all-important traffic that Facebook has just crushed to a pulp? In the past, I would have instantly recommended investing heavily in search and SEO. But Google is the other monster under the bed that the Australian Government is attempting to fight, and as a result, now even Google Search is under threat in Australia (although recent deals may indicate that prospect to be less likely).

But if publishers can’t safely or securely invest in either Google or Facebook, where should they turn? The terrifying truth is: there is nowhere to turn. TikTok, Snapchat, Reddit, Pinterest… they are nothing but tiny mosquitoes in a giant rainforest. A rainforest where Google and Facebook are the 800-pound mountain gorillas at the top of the food chain.

What about the rest of us?

And what does this all mean for marketers and advertisers who use Facebook to build businesses, rather than promote news? With less competition in the news feed from publishers, CMPs will get cheaper, resulting in a cheaper cost per lead. That sounds good, right?

But in reality, it’s a double-edged sword. Without news content being shared and read, overall time on Facebook will go down. There will be fewer eyeballs spending less time on Facebook in general. Ads on Facebook news articles are suddenly unavailable. As a result, fewer ads will be seen by a single user, which will potentially counteract the cheaper CMPs. All we can do is wait and see where the dust settles.

Back in 2020, I made this prediction:

“The ACCC’s latest plan to make Facebook and Google pay for content will ultimately hurt, not help publishers, and will result in nothing but traffic flatlining and news businesses dying. Like it or not, Google and Facebook have the duopoly on attention right now, and forcing them to pay for traffic will spell nothing but bad news.”

Today’s bad news is exactly the kind of cold, hard outcome I predicted. No matter which way you look at it, publishers are at serious risk. Let’s hope they have designed their social media exit strategy already. If not, they’re set to be yet another badly injured victim of the government’s war on Facebook.

Sabri Suby is the founder of digital marketing agency King Kong.


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