Jul 27, 2017

Facebook will give publishers 100% of revenue from new subscription feature

Noah Berger / AP

Facebook will give publishers 100% of the revenue it brings in from a new subscription feature within Instant articles, Axios has learned. Facebook will also give publishers full control over the conversion, pricing and payment process for the feature, which it plans to test with a small group of publishers later this year. The company will also give publishers access to all of their subscriber data on the platform, per a source familiar with the model.

Why it matters: This is Facebook's latest step toward creating better relationships with its publishing partners. Facebook and Google's digital ad dominance has made it increasingly difficult for publishers to make digital ad revenue. As a result, many premium publishers, like The New York Times and Washington Post, are increasingly focusing efforts on subscription revenues.

The latest news about the subscription product aligns with the asks of the News Media Alliance, a large newspaper trade group, which told Axios a few weeks ago that they want more access to data about their subscribers on Facebook's platform and a higher cut of revenue from subscriptions and advertising partnerships.

Our thought bubble: Some publishers worry that almost no one will ever hit the paywall with the way it's set up. It would give consumers access to at least 10 free articles on Facebook, on top of the 10 free articles they get from most publishers off of the platform. Thus, publishers won't really get much revenue from the new feature.

About the subscription feature: The metered paywall will likely support 10 or more free articles a month before readers are prompted to pay, and publishers will have control over which articles are locked and unlocked. The feature will support both freemium (ad-supported and subscription) and metered models. It will enable authentication for existing subscribers.

About the paywall: When people hit a paywall in Instant Articles, they will be prompted to subscribe in order to read more. The link will click through to the publisher's website where they can sign up directly via the individual publisher. Facebook has been working with publishers for months on the new subscription feature and has been briefing news publishers on their plans.

"Quality journalism costs money to produce, and we want to make sure it can thrive on Facebook," says Campbell Brown, Head of News Partnerships. "As part of our test to allow publishers in Instant Articles to implement a paywall, they will link to their own websites to process subscriptions and keep 100% of the revenue."

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