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Facebook is launching a News tab, and offers publishers “millions of dollars”

Facebook is launching a dedicated News tab later this year, and is offering publishers millions of dollars for the rights to feature their content, reports The Wall Street Journal. The company would be willing to pay up to $3 million a year to license content from news outlets, according to people with knowledge of the discussions.

Facebook is said to be in talks with The New York Times, The Washington Post, Walt Disney Co.’s ABC News, Wall Street Journal parent Dow Jones, and Bloomberg. The news-licensing deals would run for three years, and Facebook is planning to unveil the News tab sometime in the fall.

“Facebook has proposed giving news outlets discretion over how their content will appear in the news tab,” the report states. “News outlets would be allowed to choose between hosting their stories directly on Facebook or including headlines and previews in the tab that would send readers to their own websites… in which case the news tab would be a generator of web traffic for news outlets in addition to a source of licensing revenue.”

“No details to share on the WSJ report, but I can confirm we’re working on a News tab to launch this fall,” a Facebook spokeswoman told CNBC.

While it’s unclear whether any news outlets have formally agreed yet to license their content to Facebook, the Times reports that Facebook’s differentiated pitch—that its News tab would not display the main text of articles inside Facebook’s app, and would link to publishers’ sites or apps and direct users elsewhere to read whole articles—has proved more enticing to some publishers than the deal proposed by Apple earlier this year, in which the Apple News app pulls in entire articles from partner publishers.

“Real opportunity to have better monetization”

Facebook CEO Mark Zuckerberg had mentioned the possibility of creating a dedicated news tab earlier this year, during a conversation with Axel Springer CEO Mathias Döpfner. “It’s important to me that we help people get trustworthy news and find solutions that help journalists around the world do their important work,” he said.

To ensure that this new section on Facebook would feature only “high-quality, trustworthy content,” Zuckerberg had floated the idea, during the conversation, of paying publishers to feature their content, while it would be available to all users for free.

There is a real opportunity to have better monetization for publishers than we have today.

Mark Zuckerberg, CEO of Facebook

Facebook’s dedicated news tab is expected to draw 15% of Facebook users, which would be over 350 million readers, based on the number of monthly active Facebook users worldwide.

“A better environment for news”

The dedicated News tab is a separate initiative, unrelated to Facebook’s older news-oriented features, like Today In, which shows users news from publishers in their area, and Instant Articles, which shares ad revenues with news outlets.

Zuckerberg earlier emphasized that he still sees Facebook’s News Feed as a place where people primarily go to connect with friends and family. The separate tab with aggregated content from news publishers would be beneficial for those “who have a demand to want more news.” 

According to an earlier report by Business Insider, Facebook execs have emphasized that the tab won’t replace the news that’s in the feed. “This will be a better environment for news,” said Jeff Jarvis, a City University of New York journalism professor who’s familiar with the plan.

Incidentally, Facebook’s tab has already been spotted in the wild, in the Facebook (Beta) app.

“A meaningful business partner for publishers”

“We’re coming to this from a very different perspective than I think some of the other players in the space who view news as a way that they want to maximize their revenue,” Zuckerberg said in the discussion with Mathias Döpfner, in an apparent dig at Apple, which charges users $9.99/month for their “Netflix for magazines” offer, and publishers 50% of the revenue.

Local journalism is having a hard time transitioning to the internet in general, and I would hope that we can be one of the ways that we can support and make [that] more sustainable from a distribution and monetization perspective.

Mark Zuckerberg, CEO of Facebook

A person close to Facebook said it plans to gather feedback from news organizations to help improve the News tab, reports WSJ.

According to Colby Smith, Senior VP of Content and Partnerships for ABC News, Facebook shared a detailed roadmap for the product with them, indicating a high level of deliberation. A team of 10 Facebook execs asked a lot of questions, suggesting they wanted the section to have human involvement, not just be algorithm-driven, he said.

“They definitely want another crack at being a meaningful business partner for publishers,” Smith concluded.

Download WNIP’s comprehensive new report—50 Ways to Make Media Pay—an essential read for publishers looking at the multiple revenue opportunities available, whether it’s to reach new audiences or double down on existing super-users. The report is free and can be downloaded here.

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