Digital media companies have disrupted the way that we produce and consume news and other content, but they have yet to figure out how to turn that into a sustainable business model.
of NiemanLab gives a full report of the challenges facing digital media companies, and how they can try to turn a profit.
At BuzzFeed, a 32 percent miss in 2015 revenue and a halving of its 2016 revenue target, according to the Financial Times.
At Yahoo, an upcoming sale of its news-producing assets, portending great uncertainty for journalists employed there.
At Medium, a new way forward focused more on curation and licensing its platform for publishers and less on original content creation.
The list of cutbacks — at The Huffington Post, at Gawker, at Al Jazeera, at International Business Times, and at Salon among others — keeps growing. And each round poses new questions for a news business struggling to find a way forward in this millennium. After all, even if the old world of news faded (like its readers) into older age, at least we could point to the cohort of digital-native outlets with a bit of optimism.
I feared this day would come — the new digital news companies bumping into a wall. Remember the Pew study that found that more than 5,000 new, fairly decently paying journalism jobs had been created by digital news startups?
I often contrasted that increase with the great losses suffered by the local and regional newspaper industry. Those losses now stand at more than 25,000 across the country, with more jobs lost (though unreported by parent companies due to publisher edict and editorial fear) every week.
Now, if the new news companies join their legacy peers in searching for sustainable business models — just as would-be Yahoo suitors talk about the company as “legacy digital media turnaround” — we’re entering new territory.
Is this the apex of the new news? It may be — at least for a while.
Is what we’re seeing a real cratering? No. BuzzFeed investor Ken Lerer is correct on this; all the whispered schadenfreude reflects BuzzFeed envy as much as anything. (BuzzFeed has disputed the FT’s 2016 reporting, while its 2015 miss has been confirmed by Recode’s Peter Kafka.)
It is, though, a significant recalibration. If people expect these companies to have figured out how to replace the legacy news companies and navigate this new world, they’ve got to think again. There is no secret sauce in news publishing.
What we have gained: a wealth of new national news and analysis, often spirited, occasionally groundbreaking, and instructive to a news craft that needs shaking up. Most of that remains in place, and we can hope it will continue to do so.
But overall, we’re seeing the economics of text-based (not print, but text) content turning more generally dismal. Well-funded startups like Vox Media and Mic have all been talking up video, or even TV itself.
Vox has said it wants its eight brands to be thought of as eight networks, in part spurred by Facebook’s big video distribution push. The big prize here, described today by Lindsay Nelson, Vox Media’s global head of brand strategy, at London’s FT Digital Media 2016 conference is mobile video. She made a major point: The ad rates for mobile video are now matching those for desktop video.
Mic CEO Chris Altchek told me that he believes more than half of its content would be in video form by mid-2016. The newly reconfigured, slimmed-down Mashable will focus on — guess what — video. In its case, CEO Pete Cashmore’s “pivot” is to commercial video more than editorial video, but it’s still the pictures business that seems the new shiny object.
Why? It’s not primarily that customers are demanding more video. It’s that video ad rates continue to hold up far better than for ads placed alongside all those tiresome words. If the advertisers demand more video inventory, then the content side must produce more video.
Certainly, this age of almost-convergence is a wonderful one for consumers. We get to have our useful video packaged with our useful stories, and toggle back and forth. But in the world being born, video content trumps text, and more mere scribes, of all ages and of all digital skill levels, are finding themselves unwanted. The ad tail is wagging the new digital news dog, at a quickening pace.
Take the trend to a logical progression. If VR moves into the mainstream of news delivery, how many digital news companies will dial down the text and the video and make VR a format of choice for delivering the news?
The big point: While convergence should allow journalists the luxury of using the best tool — words, video, audio, interactives — for the right storytelling job, it’s video driving the business and the jobs, more and more.
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