This is perhaps why Substack, which helped popularize the paid newsletter model, has turned to its users to help fund the company after getting the cold shoulder from traditional investors. Meanwhile, subscription businesses - touted by many people over the last few years as the antidote to the limits of the ad model - have their own inherent limits: Most obviously, everyone now wants consumers to pay for subscriptions, and they are only going to pay for a limited number of them. The advertising market is very soft right now, but even when it comes back, trendlines will still be in favor of Google and Meta and against anyone who doesn’t have that mega-scale. But I worry that we’re going to be in a fallow period for some time. I wish them all well, and I’m sure some will have good outcomes - Axios, for instance, managed to sell itself at a healthy price less than five years after it launched. It recently took on a $100 million investment that valued it at $500 million, down a mere 50 percent from its 2015 peak, but it has also undergone multiple layoff rounds, including one earlier this year.Īnd here is the part of the post where I’m supposed to find promising green shoots in other parts of digital media, whether they are standalone companies aimed at smart, high-status people and advertisers who want to reach them (think Puck, Semafor, Punchbowl, et al) or individuals just making stuff on their own, with the help of platforms like Substack. Vox Media, which publishes this site, seems healthier by comparison. Vice Media, once theoretically worth $6 billion, has been unable to find a buyer, and its top executives have either left or been pushed out. Here is the part of the post where I dutifully note that other high-flying digital media companies that rode the same wave as BuzzFeed have had similar arcs. Today’s layoff announcement included a bullet point noting that “no jobs are being replaced by AI.” Peretti was able to goose the company’s value - unintentionally, he says - earlier this year when he announced that BuzzFeed was going to start using AI to make content, but that was short-lived. It’s even further off from the nose-bleed valuations it got when it was on the way up: $850 million in 2014 and $1.5 billion a year later. And it did go public in late 2021, but even as it did, it was clear that investors weren’t going to be interested, and its stock has been in a long steady slide ever since.īuzzFeed is currently valued at about $100 million, which is way, way less than the $437 million in revenue it generated last year. BuzzFeed has rolled up some other properties - it took HuffPost off Verizon’s hands a few years ago and added Complex Networks in 2021 - but not enough to give it the heft it needs to make it a must-buy for advertisers. The plan was to merge with or acquire other biggish digital media properties, get the scale to go public, and prove that it was possible to create new, large, standalone media companies. But BuzzFeed itself was supposed to be okay. One indicator was when Smith was trying to find a billionaire to fund BuzzFeed News independently back in 2018 another was when Smith left to join the New York Times two years later. The writing has been on the wall for BuzzFeed News for many, many years. The nutshell story for BuzzFeed for quite some time has been that it had a high-prestige, money-losing news operation, but that it made a lot of money from its quizzes and other pop culture and entertainment operations. But when the BuzzFeed layoff news broke today, BuzzFeed’s sub-$1 stock dropped another 20 percent, and is still there now: One indication that no one thinks of BuzzFeed as a tech company anymore: When actual tech companies announced layoffs in the recent past, investors rewarded them by bumping up their stock prices. (The blog post an Andreessen exec wrote announcing the company’s investment back then left the internet some time ago.) This was in part to help land investments from venture capitalists like Andreessen Horowitz, which traditionally avoided media companies but put $50 million into BuzzFeed in 2014. When BuzzFeed was on the way up, back in the 2014-2016 era, founder and CEO Jonah Peretti used to talk about his company as if it were a tech company, not a traditional media company.
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