THE digital publishing industry took a big hit in recent days, when more than 1,000 employees were laid off at BuzzFeed, AOL, Yahoo and HuffPost.
Vice Media started the process of laying off some 250 workers on Friday, and Mic, a site aimed at younger readers, axed much of its staff two months ago before a competitor bought it in a fire sale.
Coupled with recent layoffs at Gannett, the company behind USA Today and other dailies nationwide, the crisis in the digital sphere suggested that the journalism business was damned if it embraced innovation and damned if it didn’t.
Chris Hayes, the author and MSNBC anchor, summed up the bleak outlook with a tweet that asked: “What if there is literally no profitable model for digital news?”
While leading digital publishers have resorted to harsh measures, legacy titles such as The Washington Post, The Atlantic, The New Yorker and The New York Times have seen growth as they accommodate the habits of their increasingly digitally oriented readers.
At the same time, a digital-native business, Vox Media, the owner of The Verge and Eater, turned a profit last year, its first as a large company.
A more recent digital upstart, Axios, a buzzy site for Beltway insiders created by the founders of Politico, expects a profit this year, said its chief executive, Jim VandeHei.
Even BuzzFeed may hit its financial marks this year. If it does, the reason will most likely be a combination of old-school business methods tried elsewhere, including layoffs, rather than its ability to crack some esoteric digital code.
It was simpler in the days of print. Even when radio and television laid waste to certain newspapers and magazines, the industry as a whole racked up steady profits. Twentieth-century readers were more or less unchanging in their habits, so media executives did not have to revise their business models much from year to year.
That has changed, to say the least.
Facebook’s changes to its News Feed in recent years increased the visibility of posts from your aunts and uncles while playing down articles from professional publishers. That was no good for sites like BuzzFeed.
In BuzzFeed’s youth, Facebook was not the dominant traffic driver it is today, and online sharing was just as likely to occur away from social media platforms. (Remember email?)
Five years into its existence, in 2011, the site got newsier, with the addition of Politico’s Ben Smith as its editor-in-chief, along with a team of editors and reporters.
In 2015, Thompson, the analyst, called BuzzFeed “the most important news organisation in the world”.
That was back when Facebook was considered a natural ally for media organisations seeking millions of online readers, and before Mark Zuckerberg, its chief executive, was made to testify before sceptical lawmakers in Washington DC and Brussels.
As television viewers continued their migration to the web, big TV companies like NBCUniversal, Turner Broadcasting and Discovery Communications followed them, ploughing hundreds of millions of dollars into digital companies.
Now they would like to see a return on their investments. And they are getting impatient.
It wasn’t supposed to be this hard for digital publishers.
In 2011, when The Times drew criticism for its decision to charge online readers, creating a paywall, BuzzFeed was taking off, thanks to its knack for harnessing the power of social networks.
In that context, the paywall strategy struck media gurus as the last-ditch gambit of a slow-moving stalwart, and the conventional wisdom was that digital mastersmiths would soon outperform or perhaps even vanquish their print-beholden rivals.
By the end of last year, the picture looked vastly different. BuzzFeed generated more than US$300 million (RM1.2 billion) in sales, while still bleeding money, and The Times was on a pace to exceed US $650 million in digital revenue.
VandeHei of Axios said media companies needed more than digital savvy to make it in the cutthroat environment. “I think media is still a great business, if you run it like a damn business,” he said in an email.
Axios generated more than US$24 million in revenue last year while incurring an overall loss of US$56,000, VandeHei said.
He credited a simple reason for its success: “The audience for high-quality content is huge and voracious and growing.”
And the company’s focus on newsletters means it is unaffected by the whims of Facebook. — NYT