Like any industry, the media loves a bit of navel-gazing (what is the origin of this phrase, because I don't enjoy staring at my own navel; maybe mirror-preening instead?). When Facebook announced they were offering to host content from media sites like The New York Times, the media went into a frenzy of apocalyptic prediction, with Mark Zuckerberg in the role of Mephistopheles.
All this sound and fury, signifying nothing. Whether media sites allow Facebook to host their content or not won't meaningfully change things one way or the other, and much of the FUD being spread would be energy better spent focused on other far larger problems.
Let's just list all the conditions that exist and won't change one bit whether or not you let Facebook host your content:
- News is getting commodified. The days of being special just for covering a story are over. Beyond millions of citizen journalists that the internet has unleashed, you're competing with software that can do basic reporting. Tech press inadvertently furnished evidence of the commodification of news when, in the past few years, they all did a giant game of musical chairs, seemingly everyone picking up and moving from one site to the next. Are these sites anything more than a collection of their reporters? If so, did the brands meaningfully change when everyone switched seats? I love and respect many tech reporters, but a lot of others seem interchangeable (though I like some of them, too). Instead of just reporting news, what matters is how you report it: your analysis, the quality of your writing and infographics, the uniqueness of your perspective. The bar is higher to stand out, as it tends to be when...
- ...distribution is effectively free. Instead of pulp, our words take the form of bits that are distributed across...oh, you know. As the Unfrozen Caveman might say, “Your packets of data frighten and confuse me!” The Internet: seventh wonder of the world. This must be what it feels like to have grown up when electricity first became widespread. Or sewer systems. Okay, maybe not as great as sewer systems, I don't know how people lived before that.
- Marketing is cheaper. You can use Twitter or Facebook or other social media to make a name for yourself. Big media companies can take advantage of that, too, but the incremental advantage is greater for the indies. Ben Thompson is one of my favorite examples, an independent tech journalist/writer living in Taiwan who built up his brand online to the point that I pay him $10 a month to have him send me email every day, and it's worth every penny. He is smarter about the tech industry than just about every “professional” journalist covering tech, and he's covered a lot of what I'm covering here already. He's just one example of how...
- ...competition for attention is at an all-time high and getting worse. Facebook already competes with you, whether you let them host your content or not. So does Snapchat, Instagram, Twitter, IM, Yik Yak, television, cable, Netflix, video games, Meerkat/Periscope, movies, concerts, Spotify, podcasts, and soon VR. When it comes to user attention, the one finite resource left in media, most distractions are close substitutes.
- Facebook will continue to gain audience. Even if Facebook pauses for a rest after having gained over 1 billion users, they also own Instagram, which is growing, and WhatsApp, which will likely hit 1 billion users in the near future, and Oculus, which is one part of the VR market which is one portion of the inception of the Matrix that we will all be living in as flesh batteries for Colonel Sanders in the medium-range future. If you think withholding your content from Facebook will change their audience meaningfully one way or the other, you really may be an unfrozen caveman from journalism's gilded age. The truth is...
- Facebook and Twitter and other social media drive a huge % of the discovery of content. Media companies can already see this through their referral logs. This isn't unique to the text version of media. Facebook drives a huge share of YouTube video streams, which is why they're building their own video service, because why send all that free ad revenue to a competitor when you can move down the stack and own it yourself. And also, YouTube's ad model is not that great: those poorly targeted banner ads that pop up and cover the video in a blatant show of disrespect for the content, those pre-rolls you have to wait 5 seconds to skip...wait a minute, this sounds a lot like how...
- ...media ad experiences are awful. I wonder sometimes if folks at media companies ever try clicking their own links from within social media like Twitter or Facebook, just to experience what a damn travesty of a user experience it is. Pop-ups that hide the content and that can't be scrolled in an in-app browser so you effectively can't ever close them to read the article. Hideous banner ads all over the page. Another pop-up trying to get you to sign up for a newsletter for the site when you haven't even read the article to see if you'd even want to get that newsletter (the answer is no, by the way). Forced account creation or login screens, also before you read a word of content. An interstitial ad that tries to load video for a few seconds while you wait patiently for a countdown timer or X button to close it out as quickly as possible. Short articles spread across 3 pages for no reason other than to inflate page views. Articles that take so long to load that you just click away because in-app browsers are already disadvantaged from a speed perspective, and media sites compound the problem by loading a ton of cruft like ad tracking and other crap all over the place, reducing the content to just a fraction of the total payload. It's the reading equivalent of being a beautiful girl at a New York bar, getting hit on by dozens of obnoxious first year investment banking analysts in pinstripe suits and Hermès ties. This is what happens when you treat your reader like a commodified eyeball to monetize and not a living, breathing human whose patronage you appreciate and wish to nurture. And this is why I'm happy when services like Flipboard or Facebook transform content into a more friendly reading experience. Chris Cox of Facebook said that reading on mobile is still a crummy experience, and amen to that. The poor media ad experience is a symptom of the fact that...
- ...media business models are not great. Monopolies don't have to have great business models, because as Peter Thiel will tell you, being a monopoly is itself a great business model. For the longest time at media sites, and this probably still happens, the reporters sat on a different floor for the ad sales folks. This meant that the way the company made money was divorced from the product people (to use a more techie term). This works great when there isn't a lot of user choice (“No one ever got fired for buying IBM”) and the ad sales people can throw their weight around (before), but not so great when ad buyers suddenly have a whole lot more choice in where to spend their money (now). It turns out that having your best product people separate from your ad team is a dangerous game and leads to a terrible ad experience, which should come as a surprise to no one. Many still defend this practice as a way to preserve journalistic integrity, a separation of church and state that keeps the money from corrupting the writing, but the Internet has other ways to defend against that now. It's great that the New York Times has a public editor in Margaret Sullivan, but today the eyeballs of the world on your content serve as one giant collective public editor, like some human blockchain of integrity. I sympathize with media companies, though, because even if they wanted to improve on this front...
- ...tech companies have better ad platforms than media companies. Facebook's native ad unit may not be perfect, but it's leaps and bounds better than the god awful ad experience on almost any media site. It's better not just for readers, but likely for advertisers, too. At Flipboard, we went with full-page ads a la glossy fashion magazines because our philosophy was that when content is on the screen, it deserves your full attention, and the same with ads, never the two shall meet. This is exacerbated by the smaller screen sizes of mobile phones and tablets. Trying to split user attention with banner ads is a bad idea for both readers and advertisers, and most every study on ad recall and effectiveness that I've seen bear this out. Because of tech companies' scale and technology advantage, as noted in the previous bullet, their ad platforms will continue to get better and scale, while those at media companies will not. When I was at Hulu, we shopped around for an ad platform that could meet all our needs and couldn't find one so we just rolled our own. That's possible if you can hire great developers, but if you're a media company, it's not easy, and that's because...
- ...tech companies have a tech hiring advantage on non-tech companies. This sounds like it's self-evident, but it's critical and worth emphasizing. It's not just media but other businesses that suffer from this (which is particularly awful for consumers when it comes to information security). At this hour of the third industrial revolution, software is eating the world, but we still have a scarcity of software developers, let alone great ones. The ones that are blessed to live in this age want to work with other great developers at cool technology companies where the lunches are free, the dress codes are flexible, the hours vampiric, and ping pong tables abound. It's like being a free range chicken, but with stock options and before the death and refrigeration. Companies like that include Facebook, Google, Apple, Amazon, and so on, but they don't include most media companies, even though most of those also allow you to dress how you want, I think. Maybe someday the market will overcorrect itself and everyone will know how to program, but by that point we will probably all be living lives of leisure while AI software and robots take care of everything while we just lounge around experiencing a never-ending stream of personalized VR pleasure. If David Foster Wallace were alive to rewrite Infinite Jest, VR would be the infinite jest.
- Design skill is not equally distributed. In an age when software comes to dominate more of the world, the returns to being great at user interface design are still high and will continue to be for some time. It's no wonder that Apple is the world's largest company now given their skill at integrated software and hardware design. That's become the most valuable user experience in the world to dominate. It's not going to let up, either. Every day I still experience a ton of terrible user experiences, from government to healthcare to education to household appliances to retail to you name it. The number of great product and design people in the world is still much too finite, and it happens that a lot of them work for tech companies. Not for companies in all the other industries I named above. Even in tech, the skills are too finite, which is why enterprise software is being disrupted by companies like Dropbox and Slack and others that simply bring a better user experience than the monstrosities that pass for most enterprise software. And yes, these people tend not to work for media companies.
- Tech companies are rich. Take all the factors above, add it up, and it comes down to the fact that we're living through another gold rush, and this time most of the wealth is flowing into Silicon Valley. Take a bunch of companies that are extremely wealthy and employ great software developers and designers at a time when software is eating the world, add in a healthy dose of world-changing ambition, and you get companies that keep expanding their footprints, to the point where they are all competing in almost every business. People wonder why Apple might build a car, but I say why not? Above all, they are great at building computers, and what is a Tesla other than another portable computer (“The first one is an oversized iPad. The second is a revolutionary transport vehicle. And the third is a portable air conditioner. So, three things: an oversized iPad, a revolutionary transport vehicle, and a portable air conditioner. An iPad, a vehicle, and an air conditioner. An iPad, a vehicle…are you getting it? These are not three separate devices, this is one device, and we are calling it Apple Car.”)? Facebook, Apple, Google, Amazon, et al all continue to compete directly in more and more spaces because at their heart they are all software companies. I suppose they could have all decided not to compete with each other, but companies looking to maximize return in free markets usually don't behave that way, and so we'll see all of them trying to do more and more of the same things, like stream music and video, build smart phones, deliver stuff, etc. That's how a nuclear arms race happens. Your neighbor has the bomb, it's pointed at some part of your business, you get one too, if for no other reason than defensive purposes. Meanwhile, you also try to do some virgin land grabs, because networked businesses tend to reward first movers, and that's how you end up with tech companies trying to colonize space, build self-driving cars, float balloons around the world to bring the Internet to everyone, and, to bring it full circle, be the new front page for every user.
It's worth repeating: all the things above have been happening, are happening, and will continue to happen whether or not Facebook hosts your content.
By the way, you can still host your own content yourself, even if you let Facebook host yours. Getting yourself set up to host content on Facebook is largely a one-time fixed cost of some time to provide them with some feed. It was the same at Flipboard, though some companies took longer than expected because they couldn't output an RSS feed of their content out of legacy CMS systems. It was shocking to learn that a random blogger on Squarespace or Wordpress or Tumblr could syndicate their content more easily than a famous media company, but that was often the case and speaks to the tech deficit in play here.
This may all sound grim for media companies, but here's the kicker: it really is that grim. Wait, are kickers supposed to be positive? Maybe I meant kick in the butt.
Okay, I can offer some positives. A media company may not be able to be world class at every layer of the full stack, from distribution and marketing to ad sales and producing great content, but it doesn't have to be. Far better to be really good at one part of that, the one that tech companies are least likely to be good at, and that's producing great, differentiated content.
The fact is, great content is not yet commodified. That may sound like Peter Thiel's advice to be a monopoly. Self-evident, non-trivial, not useful. But many of the best advice is just that, as banal as a fortune cookie prescription but no less true.
Let's take The New Yorker as an example. They don't try to compete on breaking news, though they have beefed up on that front with their online blogs. They hire great writers who go long on topics, and thus they can charge something like $50 a year for a subscription because their content is peerless. I'm subscribed through something like 2020 (so please stop mailing me renewal solicitations, New Yorker, please!?).
Look at Techmeme. They provide value by curating all the tech news out there, using a mix of human and algorithm to prioritize the tech news stream to produce Silicon Valley's front page at any given moment in time. Curation is a key part of discovery, you don't have to focus on producing content yourself. A daily visit for me.
Look at HBO. A media company with great content that you can't easily find a substitute for, with a smart content portfolio strategy that minimizes subscriber churn. They surprised me recently by announcing they were going to launch HBO Now, ahead of when I anticipated, at the same price it costs to add it on to cable package. Kudos to them for not letting innovator's dilemma handcuff them for too long.
Look at Buzzfeed. Ignore the jealous potshots from their elders and marvel at their ability to create content you can't easily find elsewhere. That's right, I said it. Despite being the company that everyone says just rips off other people's content, Buzzfeed actually has more content I can't find substitutes for than most tech news sites. It's not just their original content and reporting, which is good and getting better. Like Vox trying to make the top news stories of the day digestible for more people, Buzzfeed takes fun content and packages it in a really consumable way. It turns out in a world of abundance, most people would prefer just a portion of their media diet from the heavy news food group. More of their daily diet is from the more fun food groups, and Buzzfeed owns a ton of shelf space in that aisle. It's something other sites can do, but many avoid because they're too proud or because it isn't part of their brand. I saw white and gold, BTW.
Look at Grantland. They also hit the fun part of the daily diet by targeting pop culture and sports with great writers and new content daily. People jab at Bill Simmons' a lot now that he is in the media penthouse, but he started as a blogger for AOL, and he was the first writer to really channel the fan's voice and point of view. It could've been you, perhaps, but it wasn't.
Look at Gruber, or Ben Thompson, or Marc Maron, or Serious Eats, or The Wirecutter, or Adam Carolla. Hell, even look at Fox News (just don't look too long). It turns out that differentiated content is differentiated. When the world's an all-you-can-eat buffet of information, you want to be the king crab legs, not the lettuce bowl.
The value of being a generalist as a reporter, someone who just shows up and asks questions and transcribes them into a summary article, is not that valuable. If you cover an industry, do you understand that industry? Take tech reporters as an example, many of them don't understand the underlying technology they write about. That may have sufficed in a bygone age, but it no longer does, which is good for Gruber's claim chowder business but not good business. Taking the time to become an expert in a domain still has value because it takes hard work, and that is also not a resource that is equally distributed in the world.
Some companies try to tackle more than one part of the stack, with some success. Look at MLBAM. They have managed to hire some strong technologists and build such a powerful platform that other media companies are syndicating it for their own use. Yeah, it's great to have content from a legally sanctioned monopoly to bootstrap your business, but credit to them for embracing the future and leveraging that content goldmine to build a differentiated technology platform.
Is it easy to replicate any of those? No, but your mother should have taught you that lesson long ago. At least what they're doing is clear and understandable to any outside observer.
If you've stuck with me this long, you may still think that hosting your content on Facebook is a Faustian bargain. Maybe Facebook changes their News Feed algorithm and your traffic vanishes overnight, like Zynga. Or maybe Facebook holds you hostage and asks for payment to promote your content more in the News Feed.
It's possible, but that risk exists whether your content is hosted there or not. Maybe hosting minimizes that risk a bit, but Facebook's first priority will always be to keep their user's attention and engagement because that's how they keep their lights on (and pay for the free lunches). If your content is engaging, it will keep a News Feed roof over its head, and if it doesn't, it won't.
Does that mean you have to write clickbait headlines and package stories up into listicles with animated GIFs? I don't think so, and if that's not your brand then by all means steer clear. That doesn't mean you shouldn't write a compelling headline. I despise clickbait headlines that just try to coax a click when the content has barely anything of substance, just to gain a cheap page view, but I appreciate a well-written headline over a dull one, too. Jeff Bezos used to caution us against the “tyranny of the or,” or false tradeoffs. This is one example. I also believe Zuckerberg and other Facebook execs when they say they'd like to weed out the more egregious clickbait from the News Feed. I understand if others don't, but my general belief about most tech companies is that they're just semi-evil.
Let's go deeper into the FUD. What if Facebook decides to go into the media business themselves? What if, instead of hosting your content, they produce their own and prefer it in the News Feed?
First of all, if that ever happens, it won't happen anytime soon. When you're in the phase of convincing folks to hop aboard your platform, you have to remove that possibility or no one will join.
Secondly, content production isn't generally a business that tech companies love. The margins aren't great, it's a headache to manage creative types, content production is messy and labor intensive, and tech companies prefer playgrounds where software economics play better.
It's far more likely that tech companies use their ample cash to license content. Remember how I said tech companies are rich? It turns out they are richer than movie studios and TV networks and newspapers and book publishers and music labels, and it turns out that writing a check for exclusive content hurts in the short-term but is great in the long run paired with the right business model, regardless of whether that's subscription or subsidized by ads. If you have the best ad units and platform, the marginal return on user attention is higher for you than the next competitor, and that means licensing can make sense. You also get to meet some celebrities, too, who are beautiful and charming.
Lastly, if Facebook wanted to go into the media business, they could do it now, or they could do it in the future, and your Facebook hosting abstinence wouldn't matter one bit. They already have all the eyeballs they need, it's not a situation like Netflix in its early days where they had to build a subscriber base first before they could consider producing their own original content (thank you First Sale Doctrine!). Long before Facebook even had a News Feed where your articles were shared, hundreds of millions of people already tuned in to see what that cute guy or girl was up to, or to see their friends' latest selfie, and other forms of ambient intimacy. I could perhaps even craft an argument where if all the sites out there stood on the sidelines it might accelerate Facebook's move into the space.
And if Facebook did, if they decided to compete with The New York Times and Grantland and all the other media companies, or to buy one or more of them, is that so bad? Maybe you could work for them, if you're unique and differentiated. If you are, you'll do just fine, in this world and the next.
Did I mention they have free lunches?