BuzzFeed announced that it is closing its news division, with the digital upstart crumbling under the heel of harsh economic times. But it is not alone, with many of its competitors and news outlets struggling to stay afloat. That is certainly true since many expected it to outlive and outperform organizations less capable of adapting to new trends and technologies.
Really, it is the end of an era. Ben Smith, the founding editor of BuzzFeed News, put it best when he said, “It’s the end of the marriage between social media and news.” More than that, it signals the end of a venture capital-driven digital era that changed journalism forever.
Growth and Impact of BuzzFeed News
When BuzzFeed News was first established, it focused on lighthearted and serious stories through listicles and click-bait-style headlines. The intention was to create viral stories on social media to get a large amount of attention. It was something its parent company, an online laboratory founded by Jonah Peretti, followed as well.
However, the news organization soon gained recognition for its ambitious and insightful reporting. In turn, it changes lanes, establishing an overseas presence and funding investigative journalism.
Moreover, many BuzzFeed News alumni have moved on to work for highly established organizations, including The New York Times, The Wall Street Journal, and Bloomberg News. At the same time, those competitors have embraced many of the practices that BuzzFeed pioneered as it pushed its way into the industry.
While it might not have surpassed or outlived some of its largest competitors, it has had a major impact on journalism as a whole.
Financial Struggles and Challenges
But why did it close despite all its accomplishments? Why else? Money. BuzzFeed’s news division did not manage to turn a profit, finding itself unable to bear the cost of hiring journalists around the world.
In part, the failure was more due to its reliance on digital advertising and social media traffic, which fluctuate and rely on trends. It highlights the importance of finding multiple revenue streams, especially for those in the digital media industry, who often do not get the ad revenue they need or deserve.
According to Rafat Ali, the founder and chief executive of Skift, “If you’re not building a durable brand with diversified revenue streams, then you’re not going to survive.”
The need for diversification is not a challenge unique to BuzzFeed, with all digital media companies facing financial setbacks and a need to expand into new streams of revenue, including things like:
- Branded Content
For larger digital media companies, a list that would have formerly included BuzzFeed, there is also the challenge of living up to their valuations. In today’s market, many companies find themselves trying to hold onto inflated valuations, and media is no exception.
Job Cuts and Effects on Employees
The news division is not the only part of BuzzFeed that is hurting. The closing of the division is only one part of a larger round of job cuts. About 60 of BuzzFeed’s 1,200 employees will be impacted by the closure of the news division, though some will be offered positions in other departments. Additionally, 120 employees from the company’s business, content, technical, and administrative teams will be let go.
Future of Digital Journalism
Even though BuzzFeed’s demise undoubtedly brought about changes, it does not herald the death of digital journalism as a whole. The industry will draw lessons from BuzzFeed News’ demise and that of other digital media companies that suffered the same fate.
The new emphasis will most likely be on developing sustainable business models and diversified revenue streams. By doing this, digital journalism will be able to flourish and continue to deliver insightful news to a global audience that is increasingly reliant on digital platforms.
Naturally, that raises the question of whether journalism and the media can continue to function in the same way going forward, given that they will need to diversify in order to survive. However, it wouldn’t be the first time the end of one era brought about the start of another.