As the 21st century spins away, revolutions continue to take place; life changing breakthroughs keep popping up there by creating a better and higher standard of living. Traditional methods wear off as more people break grounds in order to progress, so what happens when a news media body decides to break through using methods employed in entertainment?
BuzzFeed is an Internet media company based in New York City. The firm describes itself as a social news and entertainment company with a focus on digital media and digital technology in order to provide the most shareable breaking news, original reporting, entertainment, and video. BuzzFeed was founded in 2006 as a viral lab, focusing on tracking viral content, by Jonah Peretti and John S. Johnson III. Kenneth Lerer, co-founder and Chairman of The Huffington Post, started as a co-founder and investor in BuzzFeed and is now the Executive Chairman as well.
BuzzFeed’s news platform recently made headlines certainly after interviewing President Barack Obama this month. “News is the heart and soul of any great media company”, Peretti wrote. He also believes that though news might not be as big a business as entertainment, it is the best way to have a big impact on the world.
Peretti also told employees that journalism was essential to maintaining the brand’s credibility.
The trouble now is that the business proposition of BuzzFeed’s journalism is increasingly in question, according to several current employees and sources with knowledge of the company’s plans.
Meanwhile, BuzzFeed is increasingly staking its future on video, where entertainment is top priority.
In April, the Financial Times reported that BuzzFeed came up $80 million short of its projected revenues in 2015 (at $170 million) and had been forced to slash projections for 2016 in half (to $250 million).
Taken together, the reduced revenue projections and the shift to video signal a shift in the balance of power that favors entertainment over journalism. Many industry observers and some staff believe that BuzzFeed will eventually curtail or even jettison its news division in order to focus on more profitable revenue streams.
Currently, it can be said that the future of BuzzFeed News is hanging by a thin thread, as more and more people are voicing their concerns as to the uncertainty that video may replace reporting.
CEO, Jonah Peretti has tried to calm nerves explaining that Buzzfeed is a global, cross-platform media company for news and entertainment, therefore, like most big media companies; “we are able to do both.” While news content has generated major advertising premiums and revenue for these hybrid companies, BuzzFeed news doesn’t generate a quantifiable advertising premium for BuzzFeed, which is why it’s vulnerable.
Journalism is expensive. Good reporters cost money and they take time to produce good content. Very often, that content wins praise from fellow journalists on Twitter, but doesn’t drive much traffic. From a lucrative point of view, they argue that it could pay more to hire kids who churn out high-traffic videos instead of hiring one reporter who creates low-traffic news.
Video is a safer bet, to be sure, especially because BuzzFeed keeps video costs low in order to produce lots of content and learn what works which has always been the operating principle at BuzzFeed.
Meanwhile, NBC, which bought a $200 million stake in BuzzFeed last year, is primarily interested in the company’s video offerings. Last month, it announced that BuzzFeed would be producing special Olympic features that would publish across platforms. There is also real advertiser interest. Mondelez, the global food and beverage conglomerate that is among the world’s top advertisers, recently agreed to sponsor BuzzFeed’s new food website Tasty, which will rely heavily on video.
There is a term in the video ad market separating ‘prime video,’ which is traditional television, from what is now being called ‘subprime video,’ which is much of the internet. Video reporting solely depends on the whims of the internet user and so it is a very uncertain field to thread, nobody knows how to make video work, and now they are staking their futures around it.