MENLO PARK, CA – Meta Platforms Inc., formerly known as Facebook, Inc., is reconsidering the business relationship that their flagship social media platform Facebook.com has with several news agencies they currently pay tens of millions of dollars to for news content; if Meta decides to sever those ties, outlets such as the Washington Post, the New York Times, and The Wall Street Journal – among others – stand to lose a huge chunk of their current revenue streams.
Currently, Meta pays the Washington Post $15 million, the New York Times $20 million, and The Wall Street Journal $10 each annually to produce news content that Facebook users have completely free access to; the Journal also enjoys additional monies from Meta as part of their deal – which included other Dow Jones publications – which ups their annual take to as much as $20 million or more, reports say.
Meta originally signed three-year deals with each of the three news outlets in 2019, and with those deals due to end later in 2022, the social media giant has not yet stated if they intend to extend those agreements, create new ones, or just walk away altogether, leaving the Post, the Times, and the Journal currently twisting in the wind and facing massive revenue shortfalls.
Other publishers also receive compensation from Facebook for news content, typically in the range of $3 million or less annually.
According to sources, Meta is looking to move away from providing news content and towards producing content to attract users of rival short-form video platforms such as ByteDance Ltd.’s TikTok, which is very popular, especially with the younger set.
Meta is also looking to shift its emphasis towards building their “metaverse” technology, which is an iteration of the Internet as a single, universal and immersive virtual world that is facilitated by the use of virtual reality and augmented reality headsets; the metaverse has become a significant focal point of Meta’s Facebook platform as of late.
Additionally, Meta CEO Mark Zuckerberg has reportedly been losing interest in making Facebook a destination for those seeking news in light of new regulations instituted by multiple countries around the world that are intended to force social media platforms to pay for news content that is featured or shared on their platforms, and is seeking to take things in a different direction with the metaverse and other company initiatives.
As of 2019, Facebook and Google have been getting at least 70 percent of digital advertising revenue in local markets, which has been greatly criticized by multiple news organizations that have experienced a financial hit as a result.
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