Facebook won’t renew two-thirds of existing Facebook Watch news shows

In recent months, Facebook has been telling news publishers that it will only renew about a third of the existing news shows that it has funded for Facebook Watch, according to publishing sources that have met with Facebook.

“We’re going to continue experimenting with news publishers in Watch and sharing what we learn,” said Shelley Venus, Facebook’s video lead for news partnerships, in a statement. “We’re partnering with these organizations to build sustainable video businesses, where Facebook can be one part of their overall strategy.”

Publishing sources stressed that Facebook is still paying for news shows on Watch — the company is just being more selective and careful about what it funds going forward. Instead of Facebook subsidizing news publishers en masse, it’s functioning more as a TV network, open to canceling shows that aren’t getting viewership.

“They are not abandoning news,” said a source at a news publisher with a show that recently met with Facebook. “It’s not like the [Facebook] Live deals.”

Facebook is also looking to spend less per show as it spreads its $90 million news budget for Facebook Watch across more programs, including international news shows, The Information reported in December. Facebook has been willing to spend anywhere from $1 million to more than $10 million a year for news programming on Watch, according to a Digiday report last May.

One publisher with a show that was renewed by Facebook said the platform reduced the show’s budget by roughly 30 percent; but in exchange, Facebook is allowing the publisher to sell some of the ad inventory available in the show. Previously, Facebook sold all of the ads that aired during the show and kept all of the money until it recouped its production costs. Now, Facebook and the publisher share in ad revenue. (Facebook typically takes a 45 percent share of ad revenue on its mid-roll video ad breaks product.)

In this way, Facebook is doing more “co-production” deals, where it doesn’t provide the full cost of production but gives the publisher greater control over how it chooses to make money from the show, said another source.

It’s unclear exactly which existing shows won’t be renewed by Facebook. The platform’s news deals for Watch run for a year. That said, if a show is not performing well, Facebook has shown a willingness to cancel it early. That’s what the company did with “Mic Dispatch,” which took away a major source of funding for the publisher and led to Mic selling to Bustle for less than $5 million.

In an interview with Variety earlier this month, Venus said Facebook will “double down on things that are doing well,” while cutting others. Facebook executives have also made it clear that eventually, the company wants most Watch content to be funded entirely by shared ad revenue.

“Facebook is trying to provide the best quality content to the audience,” said Keith Hernandez, founder of consulting firm Launch Angle. “If publishers want to act like production studios, they need to embrace shows not getting picked up for another season. It happens all the time.”