March 8, 2024

Meta cancels its news feed

Meta will no longer invest in Facebook News and won't renew $66m worth of deals with Australia’s media industry.

By Stella Ong

Home > Blog > News & Insights > Meta cancels its news feed

Hey Superheroes,

Happy International Women’s Day! The S&P 500 reset its record high during overnight trading, while the ASX 200 hit the 7,800 mark for the first time in history. Both indices had also recorded closing highs last week.

Let’s get on to this week’s stories.

Meta is met with resistance over Facebook News decision

Meta might have closed at another record high overnight, but its reputation with local government regulators may have touched a new low.

Facebook’s parent company announced that it would no longer be renewing deals with news publishers as it’s decided to “better align investments” with other areas of social media.

For Australia’s local media industry, that’s a loss of about A$66M in revenue.

📰 What’s the story?

The relationship between Meta, the media industry and the Aussie government began several years back, when social media started gaining prominence as a news distribution channel.

Meta had been generating revenues from content that local journalists post on its channels for years. In an effort to spur the local media industry, the Aussie government proposed the “news media bargaining code” in 2021, which allowed local news businesses to bargain with digital platforms for monetary returns.

Since its enactment, deals struck with Meta and Google brought in about A$200M a year to local media companies.

These include ASX-listed Nine Entertainment, News Corporation and Seven West Media.

🙅‍♀️ Meta says no more

Meta announced that the number of Australian users using Facebook News dropped by over 80% last year, and thus came its decision to no longer renew media deals.

In addition, while news publishers can continue to post content through their own accounts or pages, Meta will no longer offer new Facebook products specifically for them.

🗞️ Jobs might go

Most of Meta’s local media deals are set to expire this year.

Experts in the field expect the company’s decision to cost some local journalists their jobs.

The Australian government is currently looking for ways to mitigate the issue, including potentially issuing Meta a fine of up to A$1.5B.

However such action may lead to Meta deciding to ban all news from its channels, just like what it’s done in Canada since mid-2023. We’ll just have to wait and see.

🔦 Some other things we’re shining the Spotlight on:

  • NOVO NO LESS: Novo Nordisk’s (NYSE:NVO) market cap surpassed both Tesla’s and Visa’s after positive news surrounding its new weight loss drug. Novo’s stock has gained over 90% in the last year, marking its rank as the largest public company in Europe, even surpassing LVMH.
  • TESLA AND POLESTAR ARE NOT PLEASED: The two EV companies handed in resignation letters to Australia’s Federal Chamber of Automotive Industries (FCAI) after the lobby group made “false” claims that the government’s new CO2 scheme would drive up car prices.
  • MONEY FOR VIRGIN MONEY: Virgin Money (ASX:VUK) popped 32% today after receiving a A$5.7B takeover offer from Nationwide Building Society, a UK-based bank. The latter has until April 4 to turn the preliminary agreement into a firm offer. If approved, investors would receive £2.20 a share and the stock would be delisted from the ASX.

The latest U.S. inflation figures are set to be released on Tuesday next week. This data will be followed by both the Fed’s and the RBA’s rate decisions the following week.

Keep up to date with market news and insights by following us on Instagram, @superheroau!

That’s all for this week’s Spotlight!

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