Don’t expect social media to save the news industry

WHEN Australia set up its arrangement in 2021 to have social media giant Meta pay for news content on its Facebook and Instagram platforms, it was seen as a lifeline for struggling local publishers. A “world first”, it was seen as a way to even out the power imbalance between modest-sized news businesses and the huge US-based social media giants that had sucked away advertising revenue from news outlets.

Canada followed suit with a similar deal. For a year, everything went according to plan. Meta duly entered into agreements with news publishers’ collectives and paid a fee for their content. But the period of relief for impoverished news organisations is coming to an end. The California-based tech giant has indicated that it is no longer interested in news of any kind and that it will end the payments.

Its decision came in the wake of Canadian legislation that would have forced IT companies to pay for hosting news content. Meta has now decided that news is not a significant factor in drawing users to its platform. So far, the evidence is that blocking news items from appearing on Meta platforms is not hurting its own bottom line; a news ban does not affect the time spent on Facebook or Instagram. The number of daily active users has remained stable.