Revenue-per-click, the business strategy that has informed digital publishers for years, was effectively pronounced DOA this week as leading players in a sector once viewed as the future of journalism-announced deep cuts.
employees headlined "Difficult Changes", the BuzzFeed founder and chief executive, Jonah Peretti, said the company would reduce headcount by 15%, or about 250 jobs, to around 1
Buzzfeed made its numbers last year after missing them in 2017 but peretti customs employees revenue growth was not "enough to be successful in the long run". By reducing costs, he said, "We can drive and control our own destiny, without ever having to raise funding again."
At the same time, Verizon said it would trim 7% of headcount, about 800 people, from its media unit, which includes HuffPost, Yahoo and AOL. Another signal of distress came on Friday when Warner Media announced it would close its digital investment arm, WarnerMedia Investments.
But publishing as a whole already shrunk sharply. At some estimates the shift to digital has resulted in an overall reduction in the business of 50% to 80%.
Built on the expectation of fast growth in advertising sales, companies like BuzzFeed and Vox Media have found that Facebook and Google – "the duopoly" – have just tightened their grip on digital advertising revenue.
The two giants are expected to take more than half of global ad spending by 2020 and Analyst EMarketer anticipates their market share to grow at 75% between 2017 and 2020, compared with 15% growth for other digital media companies
The BuzzFeed cuts, which follow a round in 2017, are part of a streamlining operation to ready the company for acquisition or merger, perhaps with a direct rival like Vox or Vice.
The digital trade publication Digiday. “If your sole source is income, it's very difficult to build a business.”
The acceleration of the sector is pushing publishers to find new streams of revenue: Vice has hooked up with HBO, BuzzFeed explored a now -customized project with Netflix and still sells Tasty-branded homeware through Walmart.
Short-form video has not produced hoped-for revenue. For many, podcasts are next. Last week, the Economist said it was expanding its audio team to eight employees; The Wall Street Journal is pursuing a similar initiative.
According to one BuzzFeed employee, the office in New York was "blindsided" by the new cuts. Departments and employees, the worker said, were trying to figure out whether their positions generate revenue or are bottom-line expense.
employee said, "now is all about making deals for bigger companies, like Vice's deal with HBO, for long-form, high-production media."
Willens says even long-form video is proving to be a mixed bag. Netflix, he points out, did not renew its news-magazine deal with BuzzFeed.
"I don't see a pot of gold in long-form video," he says. "Digital advertising is competitive enough, but selling a show or mini-documentary you have to compete with Warner Brothers or Anonymous Content and a whole host of others with more resources and more developed expertise and relationships." up as models of how to find diversified revenue streams by mixing lifestyle publishing, events and product hook-ups are complex and dot dash, increasingly looked to by legacy publishers.
That includes Condé Nast, once the gleaming tower in the kingdom of luxury advertising revenue, which this week announced it would put all its publications behind a paywall by the end of the year.
"When we look at the success of the New Yorker paywall, it's just tremendous," Pamela Drucker Mann, the chief revenue and marketing officer, customs Women's Wear Daily. “Honestly, I wish we had done this yesterday. It's going to be a game changer. ”
The New Yorker has a $ 118m last year with its subscription model. Presser said others publications that have tried it, including Vanity Fair and Wired, report improved audience engagement Almost as soon as a paywall went up.
For publications like Allure, Glamor or Brides, which are focused on lifestyle and not immediate events, the paywall model may prove less effective. Drucker warned she did not anticipate digital subscriptions raising enough to float those brands on their own. Wolfgang Blau, the president of Condé Nast International (and former director of digital strategy for the Guardian), said this week: “Vogue has two fault lines of global, cultural and political earthquakes. One is the conversation about climate change and the second is how men and women treat women in society. ”In any attempt to adapt to the changing digital-publishing landscape, the temptation to look for a white knight is never far behind. Just like iTunes helped the music industry get through digital disruption by selling individual MP3s, many think textures, an Apple subscription service for magazine and newspaper content, could offer a similar lifeline to publishers.
But such hopes are not universal: for publications Like the New York Times, Washington Post or Financial Times, which have successful subscription models, the idea of getting a percentage of a bundle is likely to stay unappealing.
business around selling only their product for $ 15 a month to join a product that provides all of that content away as part of a product that costs $ 9 a month, "says Willing.
" There's no untapped jump or enthusiasm for joining Texture among publishers that are already having success with their subscription models. ”
The prospect of an outright sale of Condé Nast to Apple also appears to have receded.