Calling this week busy is an understatement: in my link-saving note I managed to collate over seventy (70!) links/tweets. Have whittled them down to this: an overview of one of the more depressing media weeks in some time.
Layoffs
As you’ve probably seen, 1000+ layoffs were announced this week across various publications (HuffPo, Yahoo News and BuzzFeed are the big names). It’s incredibly sad – my Twitter feed is chockfull of people now looking for jobs. The sheer scale of these layoffs has made them more shocking than previous times: HuffPo scrapped its whole opinion section; whilst BuzzFeed cut its entertainment team, national news desk, and sacked people who’ve been with the company for 7 years.
Let’s focus on the latter, where 250 jobs are gone. CEO Jonah Peretti has said they want to cut costs so they can be sustainable and never raise investment funding again. It’s a telling line, because it shows Peretti’s been burnt by VC money. It’s not that BuzzFeed can’t be profitable: it’s that it grew way too quickly in search of unattainable scale to deliver the returns VCs wanted. So in one warped sense, the layoffs are a good sign: a sign that publishers are now looking for sustainability over scale (it’s just a shame the lesson was learnt so late).
I’ve seen loads of people sharing Chris Hayes’ tweet saying that there might be no profitable model for digital news. I think he’s wrong: profitable models do exist, they’re just hard to spot because of the decade of financial mismanagement we’ve seen.
Look to The Information for an example of a solid subscription startup; and on the free side BuzzFeed could become profitable this year. As I’ve said before, the way to get free news working is to figure out how to reduce costs, and some level of automation presents the solution to that. Kevin Roose’s article (paywalled) on his conversations at Davos suggests CEOs in all industries are thinking the same way: some want to cut 99% of their workforce (unfeasible, but it shows their priorities). Obviously not great for journalists, but perhaps good for the continued existence of publishers.
Ken Doctor thinks (paywalled) these layoffs preface mergers (“What do you do before entering M&A talks? You increase your ebitda”), and Recode’s report that BuzzFeed is considering a merger with Group Nine adds weight to that thesis. Depressing how familial this all is though: Group Nine’s CEO is the son of BuzzFeed’s chairman. As Dennis Young says, “Our lives are just a game in some weird intra-family shit. Succession was a documentary.”
I’d love to say I’ve got comprehensive answers to all this, but I’m not sure anyone does. I do think cost-cutting is prudent though, and reigning in the excesses of the last few years is smart (in a very on-the-nose allegory, BuzzFeed got rid of a LaCroix vending machine last week). TV news is going to have to go through the same thing too: the excesses there are insane. It’s a grim process, but hopefully the industry will come out stronger on the other side. Viewers’ eyeballs are worth something – let’s not let a few horrific weeks make us forget that.
PS: Not seen anyone link the BuzzFeed layoffs to Janine Gibson’s recent departure as UK Editor…but surely there is a link? Got a grim feeling that we might see the UK office decimated in the next couple days.
Condé’s Paywall
Whilst BuzzFeed focuses on cost-cutting, Condé Nast (continuing its tradition of being about five years behind everyone else) is trying to boost revenue by putting all its US titles behind paywalls. This…isn’t going to work. Sure, The New Yorker has seen huge success with its paywall ($115m in revenue!), but it is completely different from Condé’s other publications.
Last week I quoted Jessica Lessin’s idea that business model has to follow content, not the other way round. To charge for content, your content has to be worth charging for. And, to put it in the words of a random Twitter user: “most of Condé’s digital-only content is complete garbage”. Vanity Fair, The New Yorker, Wired, and Pitchfork are good (three of those are already paywalled). The remainder of Condé’s websites are by and large, terrible and sparse. US GQ’s homepage right now: a couple of useful buying guides, a bunch of political content no one cares about (who’s going to pay to get their political coverage from GQ?!?!?!), and some paparazzi photos they’ve built an article around.
A reductive analysis maybe, but I simply can’t see anyone finding this stuff worth paying for! As part of a wider bundle where you get all Condé titles for $10 a month or something, maybe it could work (it’d be like getting a Sunday paper every day). But as standalone subscriptions, the audience just isn’t there and there’s not enough content. And god help them if they try to expand this overseas: the UK GQ site is even worse, with 2 month old articles regularly featured on the homepage.
There’s a pretty obvious solution to Condé’s problems: cut down on the excess. If you’ve watched The September Issue, it’s pretty obvious that they are overstaffed and wasteful. You could produce a better website than GQ with fewer resources (HighSnobiety and Hypebeast have proven this) – maybe work on that first before you have the gall to demand money for a crappy product. Or improve your product: the mags are still good, how hard can it be to bring the sites up to the same quality?
PS: I said before that I don’t think local news can be subscription funded, but Arkansas Life has proved me wrong. I underestimated the number of people who view subscribing as some kind of civic duty – it’s encouraging that people like that exist!
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Tidbits
Me, last week: “media companies should really be prioritising innovation investments”. This week: “WarnerMedia shuts investment arm”. 😐
Apple’s started beta testing its subscription news service: looks like it’ll just be magazines to start with (Condé’s magazines seem to be included).
Amazon and Verizon are both experimenting with video game streaming. This is going to be huge…give it five years and you’ll have companies bigger than Netflix.
Blippar got acquired, proving Nick Candy doesn’t understand the sunk cost fallacy.
Phones are about to get weird: Xiaomi’s folding phone is just the start.
Microsoft’s Edge browser now tells you the Daily Mail is unreliable thanks to a default NewsGuard plugin. Could be brutal if this spreads to Chrome and Safari.
Vox wants to turn Kara Swisher into a brand. Always amazed me that UK papers with big name columnists don’t try to do the same.
Jeffrey Katzenberg (ex-Dreamworks) and Meg Whitman (ex-eBay, HP) are launching a subscription shortform video platform. Surely won’t work?
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That’s more than enough for this week – I hope next week is less bleak for you all. Play this if you want something to cheer you up.