It is well-known that large media corporations have partnered up with social-media giants such as Facebook Inc. (NADAQ:FB), and Snapchat is not achieving the lucrative results, which seemed promising upon the initial partnership agreement.
These partnerships between news entities and social media giants are namely performed due to the concern of loss-of-revenue. This is because social media giants are rapidly growing, which has led the majority of large platforms incorporating their own news feed.
Frustrations media entities are facing due to Facebook amongst other social-media platforms
Facebook alone is one of the most significant news-available social-media platforms. The company has repeatedly released various features, aimed to improve the viability of the platform becoming a social-media news giant.
However, despite this, it has been seen that the popularity of the company’s News Article program is dropping substantially, due to media giants scaling back on the use of the feature. The Article’s feature essentially enables media giants to load new articles straight on the social-media platform, instead of their own page in order to load pages faster, and improve readers experience.
In a report, which was conducted based on the meager results from the media-social-media platform, the following was stated, “On the most basic levels publishers are being disintermediated, losing their relationships with their audiences, and they fear that Facebook will further encroach on their traditional business.”
Loss of revenue that media companies are experiencing through social media platforms
In studies done on members, who make use of this supposed ‘lucrative’ partnership with Facebook, it was found that 17 members, who make use of this platform, induce an average of $7.7 million in the first half of 2016.
Although this number may be significant, it was revealed that this is only 14 percent of the total digital revenue, to which these companies make. In addition to this, there is increasing frustrations regarding a number of adverts, which can be integrated into articles.
The limitation on the number of adverts, which can be used greatly diminishes the total possible profits that these companies can be privy too. Thanks to this, the result obtained is substantially diminished in comparison to the revenue news agency’s are capable of making on their own websites.