There has been much discussion in recent days about the first anniversary of the blocking of journalistic news on Meta (Facebook and Instagram) and the impact of this blocking on the media ecosystem. But while much has been said about how the media adapted to the blocking and how citizens changed their information habits, one question has remained little addressed until now: why did Meta make so much money this year (turnover of 39 billion US dollars) if it did without the journalistic content that, according to Canadian regulators, brought it hundreds of millions of dollars each year?
The company would surely answer that it has not lost money, because the news produced by the media has never had any value in its eyes. The answer is however more nuanced and deserves a detour through the way in which the company has built its business model.
Meta is often thought to make its profits from the value of the content that circulates on its platforms. In 2022, the Parliamentary Budget Officer estimated that Meta and Google made up to $330 million from the circulation of media content in Canada. However, profits from the circulation of content are not the best tool to assess how Meta was able to value itself at a height of $1.18 trillion today, or more than a thousand billion US dollars. We should rather talk about rent and how Meta controls an extremely valuable asset: the attention of its users.
Economist Brett Christophers describes the category of rent as income derived from the ownership, possession, or control of scarce assets under conditions of limited or no competition. For him, the vast majority of the world’s largest stock market capitalizations are companies focused on controlling scarce assets, whether intellectual property patents in the case of pharmaceuticals, natural resource deposits in the case of oil companies, or personal attention data in the case of digital platforms.
Behavioral data
This last case deserves some attention. It must be understood that advertisers use digital platforms because they have become obligatory passages to reach consumers, a gigantic pool of three billion people in the case of Meta.
To make their lives easier, platforms offer them typical consumer profiles by tracking the activities of each of their users. It is by modeling these profiles, and especially by anticipating the behavior of its users, that Meta is able to offer extremely precise targeted advertising to advertisers.
Sociologist Shoshana Zuboff was right to call the model of digital platforms like Meta surveillance capitalism. For her, this new system is based on the ability to predict and modify human behavior in controlled markets.
In fact, for Zuboff, the goal of platforms is not so much to be able to predict behaviors as to be able to steer them, that is, to anticipate the modification of behaviors by constantly monitoring digital traces, such as data relating to our movements, our purchase history, our connected time, our personal, family and administrative information, etc. This is precisely what Facebook does when it confronts us with an advertisement that seems to predict our intentions, for example the fact of wanting to buy plane tickets to go on vacation.
Addicted
These economic strategies based on the control of personal data probably explain why the Quebec media have not managed to respond to the blocking of Meta. On September 15, 2023, the Fédération professionnelle des journalistes du Québec, supported by many stakeholders, organized a day of boycotting Meta’s platforms. This strategy did not shake Meta, because the company’s turnover even exceeded expectations in the following quarter, boosted by investments in artificial intelligence.
The question here is not whether journalistic content on digital platforms has value. The answer is yes. With researcher Jean-Hugues Roy, we recently demonstrated that journalistic news generated a huge amount of interaction on Facebook.
Over the years, Meta has strongly encouraged media to come and deposit their content on its platform, even providing them with personalized tools such as the Meta Journalism Project. But by choosing to ditch media, Meta bet that media wouldn’t compromise its model based on capturing user attention. Basically, Meta used media to get its users hooked, and now it doesn’t need media to keep them coming back every day. That’s the problem with network effects: today, platforms like Facebook or Instagram have become too useful, and the exit costs are high.
If Canadian lawmakers and the media industry are serious about trying to regulate Meta or Google in the coming years, they will need to change their strategy and address how these companies control their scarce assets, namely their users’ personal data. Only a bill that tackles this issue head on will be able to shake up their business models.