Brief Summary
This video talks about the rise and fall of digital media companies like BuzzFeed and Vice, examining the factors that contributed to their initial success and eventual struggles. It highlights the paradigm shifts in the media landscape, including the role of Facebook, the transition to video, and the challenges faced by legacy publishers. The video also touches upon the importance of subscriptions and the difficulties of relying solely on advertising revenue.
- The initial success of BuzzFeed and Vice was fueled by social media virality and a shift away from traditional media norms.
- Facebook's algorithm changes and the rise of new platforms impacted the traffic and revenue of these digital media companies.
- Legacy publishers struggled to adapt to the digital landscape, while digital media startups initially thrived on free content and advertising revenue.
- The shift to video presented new opportunities and challenges, with BuzzFeed facing increased competition and talent attrition.
- The video concludes that subscriptions are essential for sustainable online publishing, and advertising alone is not enough at scale.
Intro
The video starts by setting the stage, talking about how BuzzFeed and Vice were like the cool kids on the block in the 2010s digital media scene. They were quick, adaptable, and knew how to make content go viral on social media. Unlike old-school media, they weren't stuck up on traditions and covered stuff that people actually cared about, without those annoying paywalls. This made them super popular, attracting millions of viewers and big investments, which they used to make even better content and build their own news teams. Soon, they were winning awards and giving the old media giants a run for their money, making everyone think they were the future of news for millennials.
The Rise of Digital Media Unicorns
The video then talks about how Facebook played a big role in the rise of digital media companies like BuzzFeed. Facebook wanted to keep people hooked on their site, so they opened up their platform to publishers, letting them share articles and videos for free. This was a sweet deal for publishers, who got tons of free traffic and didn't have to worry about things like SEO. BuzzFeed, with its easy-to-share quizzes and listicles, became super popular with young people. But, Facebook's focus on engagement led to problems like clickbait and fake news. Eventually, Facebook changed its algorithm, cutting off the free traffic and hurting publishers who relied on it.
The Failure of Legacy Publishers to Adapt
The video then shifts to discussing how old-school publishers struggled to keep up in the digital world. Even before smartphones, making money in publishing was tough, with magazines like Time and People barely making a profit. When the iPhone came along, things got even worse. These publishers thought they could just sell the same subscriptions online, but they couldn't compete with the free content from BuzzFeed and other digital media startups. These startups believed they could make enough money from ads alone, without charging for subscriptions. While the old publishers kept pushing subscriptions, the startups filled the gap with free content, attracting advertisers with cheaper and more targeted ads on social media.
The Shift to Video and BuzzFeed's Downfall
The video then talks about how video became the next big thing, with smartphones making it easy to watch videos on the go. Digital media companies jumped on the bandwagon, creating videos to attract advertisers. But, the old publishers messed up by not using YouTube, instead trying to host videos on their own clunky websites. BuzzFeed, Vice, and Vox, on the other hand, published directly to YouTube, gaining a huge audience. However, as more publishers and creators joined YouTube, BuzzFeed's videos lost their edge. Their content was easy to copy, and their talent started leaving to create their own channels.
BuzzFeed's Business Model and Final Attempts to Survive
The video then dives into BuzzFeed's business model, revealing that it relied heavily on advertising, paid media, and affiliate marketing. But, even with all these revenue streams, BuzzFeed was still losing money. They tried to boost earnings by acquiring other companies, but it didn't work out. Eventually, BuzzFeed's founder gave up on the ad-based model and decided to launch a subscription-based social media platform. The video also touches upon other digital media companies like Business Insider, The Arena Group, and Ziff Davis, highlighting their struggles and challenges in the ever-changing media landscape.
The Importance of Subscriptions and the Future of Digital Media
The video concludes by emphasizing the importance of subscriptions for online publishers. Unlike BuzzFeed and other digital media startups, The New York Times has thrived by focusing on subscriptions rather than advertising. Subscriptions provide a stable and recurring revenue stream, while advertising is seasonal and unpredictable. The video suggests that to survive as an online publisher, you either stay small or charge subscriptions on top of advertisements.
