Facebook to Test News-Subscription Sign-Up
October 19 2017 - 2:19PM
Dow Jones News
By Lukas I. Alpert
In the coming weeks, Facebook Inc. will begin testing a feature
that will allow news publishers to sign up subscribers through the
social-media giant's Instant Articles program.
The subscriptions program will begin with a group of select
publishers on Android devices only, as a disagreement between Apple
Inc. and Facebook over whether Apple will get a cut of the
subscription revenue continues to be negotiated, a person familiar
with the matter said.
Facebook wants to let publishers keep 100% of all subscription
revenue brought in through the program. But Apple is insisting that
it collect 30% of all subscription sales, in keeping with its
requirement that it get a cut of revenue generated from apps in its
App Store, the person said.
Representatives for Apple didn't immediately respond to requests
for comment.
Publishers have long been wary of Facebook's outsize role in
news dissemination and its commanding presence in the digital
advertising market. Alphabet Inc.'s Google and Facebook are
expected to receive 63% of U.S. digital ad spending this year,
according to eMarketer -- which has made digital subscription
growth a priority for many newspapers.
Encouraging users to pay for news is a significant step for
Facebook, and the feature has long been requested by
publishers.
The arrangement will start by testing metered paywalls that will
initially allow 10 free articles from a publisher per month, as
well as "freemium" models in which publishers can select which
articles are paywall protected. Different metered models will be
tested as the program progresses, the company said.
In the future, Facebook said it would possibly test the use of
"subscribe" buttons and other similar "call-to-action" features
within its news feed.
The first test group will include the Washington Post; the
Economist; Axel Springer SE's Bild and Spiegel; Tronc Inc.'s Los
Angeles Times, San Diego Union-Tribune and Baltimore Sun; and the
Telegraph in the U.K.
"As with many products we build at Facebook, we'll observe how
people respond to this new experience, and we'll be working with
these partners to analyze, learn, and iterate over time. We hope to
expand the test to additional partners in the future," Facebook
said in a statement.
Several big publishers with robust digital subscription
businesses, such as The Wall Street Journal, the New York Times and
the Financial Times, aren't participating in the initial test
program.
A person familiar with the matter said the Journal had opted out
at this phase because the 10 article free structure conflicts with
the paper's tighter paywall model on its own site. But this person
said the Journal would be open to possibly participating down the
line as the program evolves.
A spokeswoman for the New York Times said the paper had chosen
not to participate in the program at this time but discussions with
Facebook were continuing.
A representative for the Financial Times didn't immediately
respond to messages seeking comment.
Write to Lukas I. Alpert at lukas.alpert@wsj.com
(END) Dow Jones Newswires
October 19, 2017 14:04 ET (18:04 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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