Vice is going bankrupt, BuzzFeed News is dead. What does it mean?
In a seminal 2009 essay, Newspapers and Thinking the Unthinkable, the brilliant New York University professor Clay Shirky made the point that journalism as we had known it for decades was finished – and for good reason.
The reason, in a mere two words: the internet.
And he certainly proved right. With a few notable exceptions, newspapers – once the core of American journalism – have been dying right and left.
Now, big digital media-news companies, once the great hope of postprint news, seem to be going in the same direction. Down, down, down.
In recent weeks and months, digital newsrooms have taken huge hits. BuzzFeed News suddenly shuttered, leaving scores of extremely talented journalists without employment (and lest you think of BuzzFeed as strictly a place for viral videos about cats, recall that its news division did plenty of prize-winning journalism over the years). Vox Media recently laid off 7% of its staff and raised money based on a valuation about half of what it was worth in 2015.
Then, on Monday, another major blow: Vice was filing for bankruptcy. A New York Times report was unsparing, calling Vice a “decayed digital colossus”, and noting that at one point it was thought to be worth a now-unfathomable $5.7bn.
It’s just as Shirky predicted it more than a decade ago, as he compared the coming of the internet to the arrival of Gutenberg’s printing press. Communication was utterly upended.
“This is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place,” Shirky wrote. And, amid the ensuing chaos, it’s extremely hard to see what’s going next: “The importance of any given experiment isn’t apparent at the moment it appears, big changes stall, small changes spread.”
And so it is with the news media – journalism, let’s call it – in the digital age. Many of the biggest experiments are failing.
The problem in digital news? The audience, in many cases, was there. But the profits didn’t follow, or at least not in a sustainable way. Digital advertising revenue, once thought to be based
on audience size, was going instead to social-media platforms, particularly Facebook.
Venture capitalists who had funded the news sites grew disenchanted and impatient.
“Many, many things went wrong,” Ben Smith, the former top BuzzFeed News editor, told Jon Favreau on his Offline podcast, noting in something of an understatement that “social media wasn’t going to work out the way we thought it was”. (Disclosure: I was recruited to succeed Smith at BuzzFeed News; I dropped out of the running early on.)
In fact, said Smith, whose new book, Traffic, traces the rise and decline of the digital-news dream, “the internet itself is kind of falling apart”. That may be overstating it, but Twitter users – and hundreds of laid-off journalists – would find it hard to disagree.
So when it comes to news in the fully digital age, what willwork? What will be successful, not only financially but in serving the public’s need for factbased news and information?
That’s a tricky question because we’re still fully in the grip of the digital revolution and the chaos that Shirky recognized. Some experiments are failing; others are taking hold.
It’s heartening to see the success of quality digital-first news sites like ProPublica, which depend heavily – though not exclusively – on philanthropy. The New York Times is thriving in the digital age, due partly to initiatives that have nothing to do with news – addictive puzzles, a cooking app and the product-review site known as Wirecutter. The Wall Street Journal has an impenetrable paywall and a wealthy audience who find its business coverage indispensable. The small local-news site Mississippi Today – funded through membership, events and philanthropy – won a Pulitzer prize last month; it was founded only seven years ago.
News companies that are owned by billionaires, such as the Washington Post, may have more stability than most, but still find themselves grappling with the loss of advertising revenue; even billionaires don’t want to sustain losses indefinitely. (That became clear to me as editor of the Buffalo News, once owned by Warren Buffett, who got out of the newspaper business entirely a few years ago after declaring in an interview that the industry had become nothing but “toast”.)
The Guardian, owned by the Scott Trust and sustained by its endowment, is also supported by its readers, an essential component of its current financial health.
The truth is there’s no single solution – and that’s not at all surprising this early in the digital revolution.
“Diversified revenue,” is Smith’s best answer to a sustainable business model for journalism’s future.
He’s right. Newspapers were far too dependent on print advertising and once that fell off a cliff in 2008, so did they. BuzzFeed and many others bet big on the distribution model of social media but without fully realizing that the platforms would siphon off the digital-ad dollars.
My deepest hope is that news consumers – also known as citizens – and philanthropists alike recognize the importance of quality reporting and are willing to support it.
In this time of uncertainty, the importance of good journalism is the one sure bet.
Margaret Sullivan is a Guardian US columnist writing on media, politics and culture