Facebook to launch paid news subscription product

A week after nearly 2,000 publishers in the US formed the News Media Alliance to get an anti-trust exemption from the Congress to negotiate over advertising revenue with digital platforms, a top Facebook executive has confirmed the company will soon launch a news subscription product.

Campbell Brown, the head of the company's news partnerships, said Facebook will launch a subscription-based news product with initial tests beginning in October, The Street reported late on Tuesday.

"One of the things we heard in our initial meetings from many newspapers and digital publishers is that we want a subscription product - we want to be able to see a paywall in Facebook," Brown said at the Digital Publishing Innovation Summit in New York City.

"And that is something we're doing now. We are launching a subscription product," he told the gathering.

According to Brown, the paywall idea is based on premium and metered plans and has been in the works for a while.

"Facebook plans to erect a paywall which would require readers to become subscribers of the platform after they'd accessed 10 articles," Brown was quoted as saying.

Media reports said Facebook options would seem to accommodate metered publications, including the New York Times, the Wall Street Journal and The Economist, which make a certain selection of articles free and put the rest behind a paywall.

Facebook will also give access to publications to all subscriber data through which they can understand their audience better.

The move is to let the people subscribe to publications through Facebook's 'Instant Articles' feature and support major publications with metered paywalls and "freemium" models.

The News Media Alliance that represents roughly 2,000 US' national and local newspapers, including The New York Times, The Wall Street Journal and The Washington Post, has started reaching out to Capitol Hill to sound out the chances for an exemption.

"We are not looking to break up Google and Facebook by saying they have a duopoly here, what we are saying is there has got to be a way to improve the business model," Paul Boyle, senior vice-president (public policy) News Media Alliance, was quoted as saying.

According to Boyle, newspapers had thought allowing their articles to be shared on social media would earn them a piece of the digital ad market.

"But Facebook doesn't always allow the reader to click through to the publisher's website, denying the news website ad revenue from that reader," he stated.

It is unclear, however, how payments will be handled and if Facebook would take a cut of subscription sales.

According to media reports, Google and Facebook control nearly two-third of the digital advertising industry, and newspaper revenue from advertisements declined to $16 billion in 2016, down from about $50 billion 10 years earlier.