In recent days we have seen a major set back of Digital Media Industry, more than 1000 employees are 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.
This laying off of the employees on such huge number raises the question of what went wrong with the most efficient digital media BuzzFeed. Chris Hayes, the author and MSNBC anchor asked in his tweet that “What if there is literally no profitable model for digital news?”
This has brought a new narrative of discussion that does not lend itself to a one-size-fits-all interpretation of What Went Wrong or a handy forecast of journalism’s future. In contrast to BuzzFeed, other other digital media has already taken measure to ensure their stability. 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, and a more recent digital upstart, Axios, a buzzy site for Beltway insiders created by the founders of Politico, expects a profit in 2019, according to 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.
Facebook is medium that has changed many trends. The methods of print media were simpler than the requirements of digital media. 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.
Mr Peretti seemed to be on the right track with his reliance on sponsored posts to generate revenue before his reluctant pivot to banner ads last year. That money encouraged him to stick to his idea of creating free content that readers can’t resist sharing on social media. Hedging his bets, he varied BuzzFeed’s money stream by selling branded cookware in association with Wal-Mart and opening a toy store in Manhattan.
The total revenue of BuzzFeed was increased in 2018, the laying off of this huge number of employees cannot be justified. Mr Peretti put it in a recent staff memo, “Unfortunately, revenue growth by itself isn’t enough to be successful in the long run.”
Ben Thompson, an analyst from Silicon Valley argued that BuzzFeed had inadvertently devalued its content by mostly relying on the kindness of digital giants to distribute its articles. 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.
“The only way to build a thriving business in a space dominated by an aggregator is to go around them, not to work with them,” Mr Thompson wrote in his Jan. 28 newsletters.
The changing trends of digital media have new demands of marketing, the adoption of old school methods will not work out.