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Here’s Why Facebook Is Paying News Organizations Millions of Dollars

June 30, 2016

by James Warren : vanityfair – excerpt

Facebook has cut deals with about “140 media companies and celebrities to create videos for its nascent livestreaming service, as the social network positions itself to cash in on a lucrative advertising market it has yet to tap — and keep its 1.65 billion monthly users engaged.” (The Wall Street Journal)

The company will make payments to video creators totaling more than $50 million, according to The Journal. Its partners include CNN, The New York Times, Vox Media, Tastemade, Mashable and The Huffington Post, and celebrities including Kevin Hart, Gordon Ramsay, Deepak Chopra and NFL quarterback Russell Wilson. It’s all about pushing folks to produce lots of high-quality videos. (Poynter) It previously indicated it would start paying creators to use its own live-streaming product. Now one learns about the extent of the initial deals.

What could this mean?

YouTube did something akin to this several years ago ago to seed its own channels, several digital executives note to me. The results were pretty mixed as it was not quite as direct a focus on big, established brands and as much as anything represented the seeding of money to grassroots talent. A financial aim was to ultimately recoup all the grant funding.

Facebook’s gambit seems a way bigger deal. As one digital boss put it last night, “There’s no pussyfooting about recouping the funding; it has a larger, coherent strategy to approach established brands because it believes (or had research showing) that users think having brands in their feeds elevates the quality of the Facebook experience.”

And then there’s what the executive deems the most important element: Mark Zuckerberg “is changing the game on live video by creating a critical mass of livestreamed events” that habituate users to the whole idea of live. It would try to get them accustomed reflexively to the concept of live by having streams constantly going. “Seeding this experience” with really big brands might create signals within the overall noise that users can then latch onto. It’s about directing us amid the rising babel everywhere…(more)

The question is, now that the media moguls can see their money and industries are on the line, what will they do about it. Will they protect themselves from Big Tech? Or will they just join the victor and share the spoils? Invest in Alaphabet and Facebook.

How long will free access be free when all the competition is gone?

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