Facebook to Test News-Subscription Sign-Up

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 [e-mail]

(END) Dow Jones Newswires

October 19, 2017 14:04 ET (18:04 GMT)

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