On Thursday, stock in Meta Platforms Inc., formerly known as Facebook, cratered a stunning 26% in a single trading day. And last Monday, The New York Times announced it had purchased a quirky but addictive puzzle named Wordle for a sum in the “low seven figures.”
Those two developments are more related than they first seem.
Facebook has run into a world of hurt, some of which are problems of its own making, some of which flow from the actions of competitors, but most of which reflect the public’s growing unease with the idea of “neutral” platforms embracing none of the normal responsibilities of editors and publishers.
Affection for the company has been diminishing for months, even if many remain glued to its updates. And Facebook, surely, is looking nervously at the situation at Spotify, where several star musicians have moved to remove their content from the streaming music service, due to their fury at it also hosting a podcast by Joe Rogan, which has showcased guests opposed to vaccines.
As with Twitter and the publishing site Substack, these companies relying on user-generated content are finding calls for censorship coming at them from all sides. We stand for tolerance for those with differing opinions and prefer robust engagement to deplatforming. Still, neutrality is not a popular concept these days.
The head of the Nieman Foundation (and former editor of this newspaper) has been tweeting away at Spotify for days: essentially telling them they need to edit or curate their content. “They have a responsibility for what’s on their platform like everyone else,” Ann Marie Lipinski said. That, of course, is exactly what the likes of Spotify, Substack and Facebook have been trying (and failing) to avoid.
Facebook’s stock collapsed primarily because its business model has been upended by Apple instituting a policy of forcing apps on its products to ask consumers if they want to be tracked. Facebook, of course, has grown by closely tracking its users habits, desires and demographics and then selling that information to advertisers who then can target them with a precision unthinkable to a previous generation.
Surprise! Most people have told the lord of iPhones that they didn’t want to be tracked by its apps all this time. And that has kicked over Facebook’s apple cart.
We don’t have much sympathy. Apple was right to pay renewed attention to basic privacy concerns, which have received far more attention in Europe. You cannot build a moral and viable business model based on something most people don’t actually want, even if their own lethargy prevented them from complaining.
Facebook, which has eaten the lunch of plenty of other people’s enterprises, will have to adjust, just as other media entities have been forced to get used to an ever-evolving business climate. Facebook may not have charged its users or asked them to buy subscriptions, but its adherents still were paying a price.
Which brings us to The New York Times.
By contrast with Facebook, that entity has been booming in recent times: For the fourth quarter of 2021, the company said, The Times had adjusted operating profit of $109.3 million, a 12% year-on-year increase, and revenue of $594.2 million, up 16.7%. The Times also said Wednesday that it now had 10 million subscribers, including an additional 1.2 million acquired by its purchase of The Athletic for $550 million.
The nimble buying of Wordle from its lucky creator is part of that strategy.
Much of The Times’ growth has come via a subtle morphing of an entity known for news into a dominant force within much broader fields: recipes, games, documentaries, educational products, shopping sites such as Wirecutter. The Times’ own newsroom reported on the company’s “desire to market a bundle of several digital subscriptions as a one-stop shop not only for news but for other diversions and needs.” And to do so throughout the English-speaking world, at least.
It’s hardly new for publishing companies to want to extend their brands. But The Times is edging closer and closer to competing on a peer level with the globe’s other mega-powerful content creators: Apple, for sure, or even Amazon. Perhaps Facebook is next. Certainly in a field such as cooking, dominated by peer-to-peer exchange, The Times has already achieved a remarkable level of dominance.
This success surely will give rise to new conflict-of-interest worries for Times journalists: Can it cover Apple fairly when it increasingly is competing in the same content spheres? The competitive Wall Street Journal has sharply pointed out how The Times generally has favored unionization in its news coverage and opinion columns but notably resisted it when the content creators at its own Wirecutter wanted to organize.
It’s one thing to be dominant journalistically, but it is still difficult to own so many different areas of content and still be able to report on everything with a perception of fairness. For all of its laudable growth and success, The Times has some new stuff to deal with now. It will need more firewalls and yet greater transparency.
Such are the perils of growing so large that scrutiny inevitably follows. Just ask Facebook about that.
