Facebook's new subscription efforts hit a roadblock with Apple
For now, publishers will only be able to take advantage of the subscription tool on Android.
Illustration: Lazaro Gamio / Axios
Facebook announced Thursday that it will begin testing a feature within Instant Articles that would help publishers get people to sign up for subscriptions to their sites. But the test will only roll out on Android devices at first because Facebook and Apple are still negotiating a revenue agreement — which is being complicated by Apple's rules on its partners' subscription services.
Why it matters: It's unclear, at this point, if and when Facebook will test the subscription feature on iPhones if it can't come to an agreement with Apple. For now, publishers will only be able to take advantage of the subscription tool test on Android.
Driving the news: Apple's longstanding rule that it takes a 30% revenue cut from partners when a user purchases a subscription within an iPhone app is complicating Facebook's commitment to giving 100% of subscription revenue to publishers.
" I trust they'll get their priorities straight soon enough," says Jason Kint, CEO of Digital Content Next, the premium publishers association. "Everyone is watching them."
Apple is conflicted because the company's policy is to take 30% of all subscription revenue from "in-app" sales in the first year of a user's subscription (15% in years that follow). Although Facebook will take people outside of the app to subscribe to a publishers' site, the transaction begins within Facebook's app. Apple's 30% rule has affected its partnerships with other big companies, like Amazon and Microsoft.
Aside from the Apple saga, Facebook has revealed new information about their subscription program that's being tested on Android:
Univision / Verizon
The bigger picture: The fight is the latest example of what happens when a Pay-TV provider and a cable network can't agree on a new contract, which has been happening at an increasing rate. These disputes have led to more TV blackouts in 2017 than any year prior, per the American Television Alliance. By 2022, SNL Kagan predicts that retransmission fees being charged by TV networks will increase by roughly 50%, reaching a record-high of $11.6 billion.
Lazaro Gamio / Axios
Political advertisers have some doubts when it comes to the Honest Ads Act, a bill put forward Thursday to increase political ad disclosures. According to several political ad buyers with experience buying ads on an array of platforms, the bill — while well-intentioned — is far-reaching and would be difficult to enforce. Some argue that the new disclosure rules would force advertisers to disclose highly specialized and proprietary information used by campaigns and their vendors.
Why it matters: Political advertisers expressed concern going into the legislative process that lawmakers with little understanding of the programmatic (automated) political ad-buying landscape would create rules that could not be easily implemented, or ones that would have unforeseen consequences. While many worked with lawmakers ahead of Thursday's bill unveiling to provide recommendations, some worry that the bill still has clauses that would cause adverse affects on privacy.
Richard Drew / AP
Over the past few weeks, social media controversies around election meddling, fake news, and censorship have put tech platforms on the hot seat. Three of the biggest platforms involved — Facebook, Twitter and YouTube — have all slowly introduced changes to their policies in response to pressure, mostly from lawmakers, as well as users and advertisers.
Regulators say that the tech companies are doing better to combat homegrown extremism, but that more needs to be done.
Why it matters: These companies all have business models centered around scale, and are not incentivized to apply more scrutiny to the content or ads on their platforms unless pushed to do so by outside forces. It's the beginning of a wave of backlash against big tech in Washington and beyond for failing to police the content on its platforms for years.
Hearst has agreed to acquire Rodale magazine and its subsidiary health and wellness properties, like Men's Health, Women's Health and Bicycling. The deal is expected to close in early 2018. Terms have not been disclosed, although a source familiar with the matter tells The Wall Street Journal the price was under $225 million. Hearst Magazines, which includes dozens of brands like Elle and Good Housekeeping, will manage Rodale's multi-platform content business.
Why it matters: It's another example of consolidation in the print industry, which has struggled to stay profitable as users migrate to digital. The acquisition broadens Hearst's mostly lifestyle magazine portfolio and broadens their digital footprint.
Photo: Larry Miller / Flickr cc
Pinterest is adding Search Ads to its self-service platform to help marketers of all sizes reach people who are searching for their products and services on Pinterest. The company has offered search ads for months, but now the ads can be purchased through Pinterest's self-service advertising tool, Pinterest Ads Manager, which makes it easier for small and medium-sized advertisers to take advantage of the technology. The new feature will also give advertisers the option to optimize campaigns with an "autotargeting" function which will automatically target users using similar search terms.
Why it matters: This is an example of how the search advertising market is becoming more accessible for marketers and expanding from search engines with self-serve platforms, like Google, to other platforms with large databases of information, in this case, pictures. Over 2 billion searches happen on Pinterest every month and, according to Pinterest, 97% of those searches are unbranded.
Lazaro Gamio / Axios
Nielsen, the decades-old TV measurement company, announced Wednesday that it will now independently measure viewership of subscription-based streaming content, like Netflix. Nielsen says eight subscription-based streamers are already on board, including A&E Networks, Disney-ABC, Lionsgate, NBCUniversal, Warner Brothers and others.
Netflix isn't buying it: Netflix, which is by far the largest subscription streaming company in the U.S. is skeptical. "The data that Nielsen is reporting is not accurate, not even close, and does not reflect the viewing of these shows on Netflix," the company said in a statement to Variety.
Why it matters: Nielsen has been considered the gold standard of TV measurement for decades, but has been criticized in recent years for using outdated techniques to measure TV viewership, especially as viewers migrate to digital streaming. This is the latest of steps the company has taken to resolve this, including doing away with "diaries" or written accounts of household TV viewership and adding more cross-platform TV measurement services.
Teens overwhelming prefer Snapchat to any other social media platform, according to Piper Jaffray's 34th semi-annual Teens research survey. 47% of teens indicated that Snapchat is their favorite social platform, while only 24% of teens indicated Instagram was their favorite platform.
Data: Piper Jaffray, The Taking Stock With Teens survey; Note: Survey of 6,100 teens with an average age of 16 years; Chart: Andrew Witherspoon / Axios
Why it matters: Investors were initially bearish on Snapchat after Instagram launched a rival "Stories" feature, which put a dent in Snap's user growth. But now Snapchat is proving that its focus on engagement over scale can lead to more opportunities for advertisers. A recent analysis by MarketingLand shows that advertisers have more opportunities to reach 13- to 17-year-olds with ads on Snapchat than they do on rival properties, like Facebook or Instagram.
One philosophical thing: Snapchat executives tells Axios they are focused on connecting people with their closest personal contacts. Facebook COO Sheryl Sandberg told Axios' Mike Allen last week that their strategy is the exact opposite. Facebook connects people to their "weak ties," or people they aren't close to, Sandberg said.
A person displays Netflix on a tablet in North Andover, Mass. Photo: Elise Amendola / AP
Netflix blew past user growth expectations, reporting Monday that it added 5.3 million new subscribers last quarter, upwards of 1 million more than expected.
Investors are thrilled: Netflix stock reached an all-time high in after-hours trading Monday after the network proved it could continue strong user growth internationally. Its U.S. subscription growth has been slowing, but that's because its user base is pretty saturated in North America.
Why it matters: Hitting revenue estimates is a big win for Netflix, given that it poured a ton of money into programming investments (more below), as opposed to focusing on profit. It's also another reminder for Pay-TV providers and TV networks that the traditional cable bundle can't compete with the power of on-demand.
What's next? Netflix's chief content officer Ted Sarandos on Monday'searnings said the tech giant is inching closer towards producing dailynew, original content and will invest a lot more in original films: "We plan on (releasing) about 80 (original films) coming up next year and they range anywhere from the million-dollar Sundance hit, all the way up to something on a much larger scale."
Elise Amendola / AP
Univision announced last night that Verizon pulled its signal from its FiOS and mobile platforms "entirely without warning," leaving mostly East Coast consumers without access to programming. Univision says it's "deeply concerned," especially "in light of recent natural disasters and current events impacting the Hispanic community." Verizon says Univision is charging too much for its waning viewership.
Why it matters: It's the latest example of what happens when a Pay-TV provider and a cable network can't agree on a new contract. With new competitors in tech, the big Pay-TV distributors are incentivized to drop cable networks that are underperforming or too expensive, possibly to create their own skinny bundles. (We saw these dynamics play out two weeks ago when Altice threatened to drop Disney and Sunday when Charter struck a last-minute deal with Viacom.)
Go deeper: TV networks have been charging cable and satellite providers fees to carry their content for years, spurring more and more carriage fights. But pay TV providers are continuing to boycott the fees being demanded of them, causing TV blackouts all over the country. With more consumers cutting the cord, the atmosphere has gotten tense. By 2022, SNL Kagan predicts that retransmission fees being charged by TV networks will increase by roughly 50%, reaching $11.6 billion.