Opinion piece: Is Facebook Dead?

We've been asked a couple of times how we feel about Facebook's imposed news blackout. We thought the best way to answer this question would be via a short blog.


As we currently scroll through our Facebook NewsFeed, things feel a little empty. There's only so many statuses you can consume and the algorithm seems to be struggling to provide valuable content to the end user, assumably due to the black hole that has been created by blocking news sites - entertainment, sports, politics etc.


Do we think this ban is going to be permanent? Absolutely not... And we'll give two reasons why below;


The best content is either entertaining, or informative


In order for individuals to engage in content, it must either be entertaining or informative. Arguably, Facebook has managed to sustain their competitive advantage for so long due to their ability to aggregate news for end consumers in a quicker manner compared to traditional news platforms.


On the flip side, platforms like TikTok and YouTube have slowly been stealing users by providing entertaining content in a more palatable format for the younger generation.


By removing the ability for news outlets to publicise their recent stories, we would argue that Facebook is foregoing a critical component of their competitive advantage that they have over other social media platforms.


Money flows where attention goes


The main reason that Facebook has decided to stop allowing news sites to publish content on their platform is because of the free revenue that they are subsequently generating from this exposure.


We feel that this is quite counter-intuitive however, as the only reason that Facebook have become so profitable themselves is due to their ability to generate so much revenue via paid ads that are promoted on their platform.


By reducing the informative content that is available on their platform, we suspect that the number of active users utilising Facebook will decline. The impact on this reduction in active users will be that many organisations will decide to utilise their marketing budgets on other platforms, where exposure and activity is high i.e. TikTok, LinkedIn, YouTube etc.


To summarise, we don't think that the news blackout on Facebook will be permanent because:

  • It reduces the amount of informative content available on their platform

  • Less informative content will lead to less people using the platform

  • Lower number of active users will eventually mean that they will not be able to charge as much for Facebook ads - the main revenue generator for Facebook.


We could be entirely wrong with the above, but that's just our view!


If yours differs, please get in touch!


Cheers,

The Bearded Man







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