An unpleasant reckoning is occurring at media upstarts.
BuzzFeed and Verizon Communications’ former Oath unit are slashing jobs. Like their mature counterparts in a changing advertising world, these newer news organisations may need to merge to survive.
But they may well lack something the older players still have: The likes of the New York Times can sell their content.
BuzzFeed is cutting 15 per cent of its workforce or about 250 jobs, according to the Wall Street Journal. Verizon Media is lopping approximately 800 from its payrolls, CNBC reported.
The telco in December wrote down half the $9 billion it had paid for dying internet brands AOL and Yahoo. While it’s sad to see reporters lose their jobs, it’s a sign of one more twist in the story of digital disruption.
Jonah Peretti, BuzzFeed’s chief executive, suggested that a rollup of internet publishers like Vox Media, Vice and others could achieve needed efficiencies of scale.
Even that, though, may be only a temporary answer. Most such firms hitched their wagons to digital advertising as their main revenue stream. Yet Alphabet unit Google and Facebook are grabbing much of the benefit, just as they laid waste to the print ads that used to support newspapers.
The New York Times hit serious trouble and had to seek a loan from Mexican billionaire Carlos Slim in the wake of the financial crisis a decade ago. That spurred the Gray Lady to charge for its digital content.
While it hasn’t replaced all the lost ad sales by any means, subscription revenue made up more than 60 per cent of the company’s top line for the nine months ending on September 30.
Asking readers to pony up will be harder for the newbies and it will pit them against their older rivals. The New Yorker magazine, for example, generated $115 million in subscription sales last year, the Wall Street Journal reported. Consumers will only stump up for so many publications.
After years of being upstaged by apparently more nimble upstarts, old media’s history, breadth and doggedness may once again be turning into an advantage. — Reuters
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