Another Snag For Digital News Media, No Confusion

Michael Hedges March 26, 2022 Follow on Twitter

New media in the digital age has been defined by not being old. The most distinguished do not appear on a printed page or hurl their words through the airwaves, though podcasts and TikTok videos are recently adopted features. They are also, in a general sense, pure players, specialist digital publishers tied together and itself by the internet. Investors and venture funds have shown them considerable love.

In a memo to employees, reported by AP (March 22), BuzzFeed chief executive Jonah Peretti said its news division “will need to get smaller.” For most the last decade BuzzFeed has done nothing but get bigger. Those days seem to be over for the pure player digital publisher with an avaricious acquisition path, fueled by the bright heat of serial digital investors.

The focus for BuzzFeed News, said Mr. Peretti, will be “big breaking news, culture and entertainment, celebrities, and life on the internet” to “"prioritize the areas of coverage our audience connects with most.” Voluntary buyouts are being offered newsroom staff and editors. “I’m no longer going to subsidize with revenue from other divisions, and that's a change from the past,” he added in the earnings call. "We did that for many years, but now we need to transform news into a sustainable business.”

The larger BuzzFeed is, indeed, profitable. That fact allowed the company to go public last year through a SPAC rather than IPO. For those not immersed in the cryptic (related to crypto) language of high finance SPAC is special purpose acquisition company also known as a “blank check” or shell company and IPO is initial public offering, the more traditional means of scoring public investment. Mr. Peretti, also the founder, said BuzzFeed is “accelerating investment in vertical video,” which is the stuff of TikTok. HuffPost, formerly Huffington Post, and pop culture website owner Complex Networks were recent acquisitions. For both, editorial layoffs followed.

BuzzFeed News, at latest count, had 100 employees in New York City and lost US$10 million last year and every other year. Three BuzzFeed News reporters won the 2021 Pulitzer Prize in International Reporting for a series on mass detention of Uyghur Muslims by the Chinese government. To considerable uproar, BuzzFeed published the Steele Dossier, a document containing unverifiable claims of the relationships between former US president Donald Trump and various Russians. 

“Several large shareholders,” noted CNBC’s Alex Sherman (March 22), “have urged” Mr. Peretti “to shut down the entire news operation.” Major investors include Redwood Capital Management, CrossingBridge Advisors and Cohanzick Management in addition to SPAC specialist 890 5th Avenue Partners. Entertainment portal The Wrap (March 23) suggested BuzzFeed may “pivot to NFTs and the metaverse.”

As its news division wafts away, BuzzFeed is now just another web publisher selling native advertising. Vice Media, also once a digital darling complete with TV studios, followed the same course, along with Quartz and Slate. Then there was Ozy Media. Said one digital observer, viral clickbait content was confused for being “far-sighted and hip.” With little surprise, many fugitives of the inevitable downsizings and purges fled to similarly funded digital publishers or Substack newsletters.

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