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Ben Lerer of Group Nine Media Inc., who runs a collection of websites and apps probably unknown to anyone under 30, has seen the future: it's Facebook Inc.'s  (FB) - Get Facebook, Inc. Class A Report  Watch.

In a conversation held at the Paley Media Center on Thursday, Oct. 26 with Facebook executive Dan Rose, Lerer expressed vindication that his company's sites -- Thrillist, NowThis, The Dodo and Seeker -- can get access to millions of viewers because of the quality of their work. No longer are they pushed to the back of the room, or a high number of the TV dial because they're not owned by a major media company such as Walt Disney Co. (DIS) - Get Walt Disney Company Report or 21st Century Fox Corp. (FOXA) - Get Fox Corporation Class A Report .

"What I love about the platform is that it's a meritocracy," Lerer said. "If you make great content, people will see it. If you make not as great content, people aren't necessarily going to see it. With traditional media, a lot of distribution was sort of granted through partnerships, through carriage rights. And now, you have this world where quality is very important, and there's more transparency to that."

Rose, who heads Facebook's expansive partnership group, said the Watch tab on the social network which debuted in September, is it's answer to video creators such as Group Nine who have long wanted a place to show their work. Facebook created Watch in order to showcase higher-quality, episodic show that can attract mass audiences and, by extension, sell advertising.

A video team from NowThis was in Las Vegas on Oct. 1, Lerer told the audience of TV and advertising executives, ostensibly to create a segment on the city's new NFL football team. But when the shootings at the Route 91 Harvest music festival occurred, NowThis' project evolved into something more ambitious. It will appear on Watch later this year.

For Facebook, such projects open up new possibilities, most prominently, to become an alternative to pay-TV. For the moment, Watch is something of a cross between Alphabet Inc.'s (GOOGL) - Get Alphabet Inc. Class A Report YouTube and its news feed. There's a fair amount of reality TV fare, though Rose hinted that over time, higher-quality material will rise to the top of the platform.

"Media content has exploded, and people want to see more of it," Rose said. "As a result, publishers are creating more video, and new publishers are emerging that didn't exist before. And as we adapt to that landscape, we're talking with partners about what's working and not working, and then we make changes in the platform."

One area of some tension has come from Facebook's relationship with news publishers. Yes, they want their articles to appear on the platform, but they also want to be appropriately compensated.

When Facebook's Campbell Brown in July said the company would launch a subscription-based news product this year, David Chavern, president and chief executive of the News Media Alliance, which represents 2,000 newspapers and digital publishers in the U.S. and Canada, said he wasn't overly optimistic it would solve the problem of his members' content appearing on the site but getting little to no money for it.

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"There's been a long-term request that Facebook have better integration with the publishers' subscription models," Chavern said. "We're hopeful. I would love for it to be a great product that was really great for publishers, but we don't know yet."

The News Media Alliance is pushing to win an antitrust exemption to allow publishers to collectively negotiate content deals with platforms, most pointedly Google and Facebook. Chavern said the very business models that sustain legacy newspapers are at risk given that Facebook and Google swallow about two-thirds of all digital advertising.

Facebook has come under some criticism of late for claiming that it hasn't morphed into something of a media company. And while no one disputes its roots in technology, Facebook has become a giant clearinghouse for getting and sharing news. Echoing Facebook COO Sheryl Sandberg's recent declaration that Facebook isn't a media company, Rose asserted the platform serves as an aggregator that doesn't make editorial decisions.  

"Brand matters, and in news this is where we hear it the most," Rose said. "Publishers who are investing in quality journalism have a brand, and that brand says something about whether the content is likely to be informative or accurate. What we're not going to do is make a judgment about whether this is a publisher we believe you should see. We're going to let people make that judgment themselves."

And that's fine with Lerer. Group Nine was formed a year ago when Discovery Communications Inc. (DISCA) - Get Discovery, Inc. Class A Report made a $100 million investment in Lerer's websites while adding The Seeker to the group for a 35% stake in the new company.

NowThis employs about 120 people at its Soho office in New York, making a slew of short videos based on news stories. Some are repackages of popular trending headlines, some are commentary, and some are just plain wacky. In just a few years, NowThis has become the largest video news publisher on Facebook, with 2.4 billion video views each month.

"Publishers like us; we're able to start thinking about IP," Lerer said. "So not just putting content on a platform where it can feel disposable. We can create things that are higher quality, that can have a longer shelf life, where you can build your own fan bases. The best media businesses are going to build repeatable, scalable franchises that can be taken to different platforms and different windows and go internationally."

And that's where the media business is headed.

Facebook and Alphabet are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer and the AAP team buy or sell FB and GOOGL? Learn more now.

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