Facebook considers paid subscriptions for articles
Facebook has been proceeding with plans to offer paid subscriptions to publications using Instant Articles as a possible way to support publishers with freemium content and metered paywalls, with testing starting at the end of the year, according to an inside source. The feature would also grant publishers total control of pricing and measurements. Critics have argued newspapers' varying pricing models make it impossible to offer a uniform price structure. "We’ve been briefed and are continuing to evaluate if we’re going to participate. So far, we don’t see any great upside," said a senior executive at the New York Times.
Facebook is moving ahead on plans to let people subscribe to publications through Instant Articles. Nothing’s final, but the current thinking is that it will support publications with metered paywalls and freemium models, said a source familiar with the briefings. These options would seem to accommodate metered publications including Facebook skeptic The New York Times; and The Wall Street Journal and The Economist, which make a certain selection of articles free and put the rest behind a paywall.

Facebook seems to have made other concessions to publishers. They’ll have access to all subscriber data, according to the source, which publishers want so they can understand their audience better. A controversial proposal to let people buy bundles of publications from different companies is now off the table. Publishers also are expected to have full control over pricing.

The paywall limit as it stands now may not satisfy publishers with stricter limits such as The Washington Post, which lowered the free monthly article limit to three from five earlier this year as it tinkers with its paywall to drive new subscriptions. It speaks to Facebook’s dilemma, though. Each publisher has a slightly different model, and each publisher will want to replicate its own model on Facebook. Facebook also believes in creating a uniform user experience, though.

Several details of the subscription feature are still undecided. They include how payments will be handled and if Facebook will take a cut of subscription sales. Payments are complicated because when they go through smartphones’ app stores, the stores take a 30 percent cut. One publisher said Facebook is leaning toward letting them be handled through the mobile web, which would eliminate a layer of complexity and the app stores’ cut and would let publishers have more control over pricing and data. It’s also unclear if publishers would get data on users’ reading history, as they can on their own site and which can help them tailor offers.

In the end, the question for publishers like the Times and Journal that have been cool on Instant Articles is whether there’s an advantage to Facebook’s proposal of letting them sell subs through Instant Articles instead of posting to Facebook the old-fashioned away and letting people subscribe by traveling to the publisher’s own site. Facebook would argue that Instant Articles have a higher click-through rate than articles posted the old-fashioned way. But selling subs that way will require publishers to give up more control over customer data and the meter level than they’d like.

“We’ve been briefed and are continuing to evaluate if we’re going to participate,” said a senior executive at The New York Times. “So far, we don’t see any great upside.”

Still, the platform’s efforts have won it appreciation, albeit grudging, from even longtime detractors like Journal parent News Corp. “They’re trying to create a [system] that keeps everyone happy, which is a pretty tough brief,” said Karl Wells, gm of WSJ Membership at The Wall Street Journal, in an interview last month.

Facebook’s time frame to roll out subscription tools is also getting more concrete. Facebook aims to test them with a small group of publishers at the end of the year and expand them to others in 2018. The idea is to have a diverse mix in the test group, representing U.S. and international and big and small titles. Facebook has already briefed The New York Times, Tronc, Hearst, The Economist, Germany’s Bild and the U.K.’s Telegraph one-on-one and plans to have group meetings with more media executives in New York and Paris the week of July 10.

The movement on subscription sales comes as Facebook has been trying harder to win over publishers that are getting increasingly frustrated over their lack of ability to monetize their content on the platform and are also getting in some cases what they feel is better treatment from other platform giants, Google and Apple News. The newspaper trade association News Media Alliance is leading an effort that seeks to let members negotiate collectively with Facebook and Google.

As part of its charm offensive, Facebook in January launched the Facebook Journalism Project, which has involved working with publishers to understand what they want to get from the app. Publishers have been seeking ways to sell subscriptions since Facebook rolled out Instant Articles in 2015 and have been been clamoring for more ability to monetize their content on the platform through advertising as Google and Facebook have swallowed up more and more of the digital ad pie.

“We are in early talks with several news publishers about how we might better support subscription business models on Facebook,” Campbell Brown, head of news partnerships, said via a Facebook spokesperson. “As part of the Facebook Journalism Project, we are taking the time to work closely together with our partners and understand their needs.”