Digital Content Firms’ Buzz Fades
Buzzfeed and its ilk looked like the belles of the media ball just a few short years ago. But as 2018 comes to a close, the digital darlings of yesteryear are in pain.”
“Psst. Wanna merge with my company?” Reading between the lines, that’s the message from Buzzfeed CEO Jonah Peretti to his fellow digital-media companies in a Nov. 19 interview with The New York Times. He took the curious step of wondering aloud — on the record — whether it would make more sense for him to combine forces with the likes of Vice, Refinery29, Vox Media and Group Nine to gain more leverage in their lopsided relationship with platform giants Google and Facebook.
How did we end up here? Buzzfeed and its ilk looked like the belles of the media ball just a few short years ago. They were everything traditional content companies weren’t: social-savvy, mobile-friendly and data-centric. They were a new breed poised to inherit the earth when the sector’s dinosaur incumbents who invested in them were on the verge of collapse.
But as 2018 comes to a close, the digital darlings of yesteryear are in pain. Revenue diversification efforts are doing little to ease the monetization struggles that come with playing in the digital ad-supported field. Layoffs have reduced their ranks. If the longanticipated multiple merger — or “roll up” — of these companies is finally going to happen, the moment may well be here.
Which brings us back to Peretti, who looked more than a little desperate floating a trial balloon to maneuver toward the kind of transactions that — if he truly had a chance to make happen —would already be transpiring behind closed doors. Uttered in the context of a news article, Peretti’s urge to merge came across less as a stirring strategic call to arms than a plaintive admission that it’s not going to happen even though it really should.
But even if Peretti somehow pulls off a multi-company merger, there’s also the question of what, if anything, would change in terms of how content companies can reduce the power of the platforms. Though Facebook and Google also have plenty of their own problems right now, even the worst-case scenario for them wouldn’t do much to diminish their clout relative to Buzzfeed, et al. As Peretti himself must realize, achieving scale is really just the beginning of resolving all the issues that plague the screwy dynamics between content and distribution in the digital-media business.