Traditional media formats are getting a second look: Facebook, Apple, YouTube, and now Snapchat are exploring ways to apply standard publisher models to their news feeds. According to Recode, Snapchat recently announced a major change to its “Discover” section in which it will pay content producers a flat upfront licensing fee and sell ads against them—the same arrangement traditional media formats like TV networks use.
Snapchat had previously let publishers sell ads against their content while it also sold its own ads against the same content and then split revenues. For publishers, this is a mixed bag. While they’ll have guaranteed payment for their content, the upside for them is limited; if a post goes viral, Snapchat benefits, not them. Such a reversion to form illustrates how disruptive technologies are favoring more traditional models as social media is maturing.
New Media Embraces Traditional Media Formats
When social media first emerged, players like MySpace and Facebook attempted to monetize via display ads. When publishers like The New York Times and The Washington Post joined, the resulting content became a vehicle to attract users and keep them on the sites longer. At a certain point, however, Facebook (for one) realized it held more power than the publishers themselves.
In 2015, Facebook introduced Instant Articles, a format in which content from The New York Times, BuzzFeed, and The Atlantic, among others, showed up as stories in the News Feed that didn’t actually click back to the publisher’s site. Facebook didn’t pay anything up front, but let publishers sell ads against the content or rely on Facebook to sell them, in which case the publisher would get 30 percent of revenues. Apple offers a similar deal for inclusion in Apple News.
As the MIT Technology Review pointed out at the time, this wasn’t the way other digital media companies arranged such deals. Spotify, for instance, pays 70 percent of its gross revenues to music publishers for the rights to their catalogs, and Netflix paid $3 billion in 2015 in licensing and production fees to the TV and film industries. Facebook is not averse to other models, though: To get its fledgling Facebook Live offering off the ground, it paid key publishers to create content, The Drum reported.
New Media Grows Up
Netflix also began as a distributor—first with DVDs and then with streaming video—but began creating original programming a few years ago, as did rival Amazon. Snapchat appears to be eyeing the same transition. The company recently began recruiting development managers to create original content, also according to The Drum. Even some retail brands have taken this approach, most notably GoPro, which plans to produce 30 short-form TV-style shows as it restyles itself from a maker of cameras to a content hub.
Such thinking inevitably involves TV, or at least an emulation of a TV model that continues to prove its value. Facebook’s decision to promote Live with TV ads signaled that even this social media giant sees TV as a robust marketing channel to which viewers continue to be drawn. In the age of TV everywhere, Facebook and Snapchat realize that they’re either in the content delivery business or the content business—or both. Either way, each of them now constitutes only one of many available channels.