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September 06, 2022

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🍿 Situational awareness: The Venice Film Festival is underway. The biggest controversy is not who gets the longest standing ovation but rather the amount of drama encircling "Don't Worry Darling."

1 big thing: Platforms pull back on originals

Illustration of a hundred dollar bill with burn holes and scorch marks.
Illustration: Aïda Amer/Axios

Facing economic headwinds, tech platforms have pulled back on providing financial support for news organizations, studios and individual creators in exchange for content, Kerry and Sara Fischer write.

Why it matters: Content creators can no longer guarantee receiving checks from platforms and instead must be more strategic about how they monetize themselves.

Driving the news: Snap announced last week it plans to discontinue investments in some Snap Original shows.

  • The company said it will honor recent deals and continue to support its own show, "Good Luck America." But it will stop most new investments.

State of play: Platforms have sought original programming as a way to entice new users and increase engagement, akin to entertainment platforms like Netflix and Hulu.

  • Netflix has decided to cut back on its massive spending on content, however, following its subscriber losses earlier this year.
  • YouTube began to shut down its original production team in January.
  • Meta announced in July it would no longer pay publishers for content in Facebook's News Tab.
  • Substack has scaled back on its upfront payments to writers and other support services, per The Information.

Be smart: Tech platforms like Snap and Meta touted the importance of creators during the Interactive Advertising Bureau's annual NewFronts ad presentations earlier this year.

  • That pitch still holds true. These companies are just betting professional content creators will continue to produce for their platforms without as much direct funding.

What to watch: Global regulatory pressure on tech firms to pay media outlets for their content could make efforts to pull back tougher.

  • In the U.S., lawmakers introduced a bill that, if passed, would force tech companies to pay news companies for their content.
  • A similar framework was introduced in Canada earlier this year to force tech firms to negotiate terms with publishers.
  • Both the U.S. and Canada are modeling their efforts after a bargaining code that was passed into law in Australia last year.

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