The Economics of Platform Publishing

As platform publishing comes of age is it providing a stable base for publishers?

Frédéric Fillouxs Monday note looks at the Unicorns of digital media and asks if the astronomical valuations of companies like Buzzfeed, Facebook, Twitter, Snapchat, What’s App and Pinterest are justified, or is there something of the ‘emperor’s new clothes’ going on?

To many modern media companies, regardless of their core products, spreading editorial contents through ecosystems controlled by Facebook, Apple or Google is not just a good idea, it’s a matter of survival. Even the most reluctant join the fray. According to a publisher: “Saying that distributed content is threatening the brand is like saying that going digital killed print”.

On the face of it 2016 has already seen some promising developments for publishers distributing via platforms; Facebook has been making publisher friendly adjustments to its advertising model. The Wall Street Journal says;

‘it’s getting easier to make money from Facebook Instant Articles, according to multiple publishing partners enrolled in the program’.

Recode report on changes at Snapchat’s Discover which will help users to subscribe to publishers channels, helping publishers and audiences to connect as the platform becomes more crowded.

A social media editor now has a critical role in a news organisation and publishers are hiring them in fistfulls.

As Digiday points out, all this investment in platform publishing doesn’t come cheap. And so back to Filloux and his note of caution;

As long as publishers’ and distributors’ interests are aligned, everything’s fine. But who can guarantee such harmony will last?Second: most players who currently enjoy social leverage live in the hope that Facebook will come up with some direct monetization model. While Buzzfeed and its likes are making it big by producing and spreading social contents on behalf of their clients, many others expect that Facebook will come up — soon — with models that will favor sponsorship, as an example. They are building large audiences on Facebook with that goal in mind. The third risk is the level of sensitivity to economic conditions. If, because of a recession, ad markets go South, it is doubtful that a car maker or a beverage company will continue to divert top dollars for bespoke productions aimed at the social sphere.