BuzzFeed CEO Jonah Peretti says Facebook should share revenue as well as traffic
If Facebook wants to influence what shows up in its News Feed, it should pay publishers.
Facebook has been mostly good about sharing traffic with publishers through News Feed.
But BuzzFeed CEO Jonah Peretti thinks Facebook should also be willing to share in the revenue it makes from New Feed.
“The big question with Facebook is most of Facebook’s revenue is in News Feed, and that’s where they’ve not shared revenue,” he said at Code Media in Huntington Beach, Calif.
The places Facebook has been willing to share money, Peretti pointed out, are in areas with smaller audiences, like its new Watch section that houses original video content, or Instant Articles.
He added: “These are places with a lot less distribution so there’s a lot less revenue.”
The larger point Peretti is trying to make is that if Facebook wants to have more influence over what appears in New Feed — as well as what doesn’t appear like fake news or Russian trolls — it would have an easier time doing so if it paid publishers.
“Facebook will have no chance to control what’s in News Feed if the only lever they have is traffic, because the only way to say we want influence over this content is if you have a lever of content and a lever of revenue,” he said.
Peretti cited an earlier Code Media speaker, YouTube CEO Susan Wojcicki, who reminded the audience that her company recently took action against one of its biggest stars, video blogger Logan Paul, who has been posting questionable content, by suspending his ability to make money from his posts.
“Having the lever to demonetize is very powerful,” Peretti said.
Watch Peretti’s full interview below.
Facebook has been trying to find ways to profoundly change how news, real or otherwise, shows up in News Feed, and it has embarked on some key changes to its software to show what it considers to be more meaningful content. Some of that involves showing more posts from friends and family and fewer posts from news publishers.
Peretti had said in December how “the media is in crisis,” arguing how Facebook and Google have distorted the media ecosystem by hoovering up most of the digital ad revenue and putting “high-quality creators at a financial disadvantage.”
The critique was notable since Peretti is one of the few media executives who has the ear of Facebook and Google. Prior to BuzzFeed, Peretti had helped Arianna Huffington start the Huffington Post, which had grown on Peretti’s digital wizardry.
That suggested his letter was partly a sound of frustration on the part of the CEO.
He said of the big tech companies: “I don’t think they fully understand the perspective of media or content or other industries. Or, on occasion, they interact with people at media companies and they don’t think they’re that smart.”
Part of the problem is just miscommunication, he added.
Facebook executives Campbell Brown, who heads up news partnerships, and Adam Mosseri, who leads the group that manages News Feed, outlined the difficulty in managing the expectations of both publishers and Facebook’s audience earlier in the evening at Code Media.
“We’re trying to figure out how to best measure and understand that,” Mosseri said. “The key components are any interactions between two people. So it’s about people-to-people, not people-to-publisher or people-to-business or people-to-page.”