Global digital publisher BuzzFeed has gone from a forecasted profit of $US30 million for the year to a potential loss of $US20 million, according to reports in the Financial Times.
Founded in 2006, the company has long struggled to turn over a profit, despite its enormous readership.
After culling 15 per cent of its global workforce last year – including 25 staff members in the Sydney office – and launching a host of new initiatives to generate new revenue streams, including its own line of kitchenware, BuzzFeed appeared on track for a big 2020.
“BuzzFeed has expanded our data-driven approach to growing audience to include revenue,” said BuzzFeed founder and CEO Jonah Peretti in a blog post in January this year.
“With the exception of News, every content division is now operating profitably, and News is trending in the right direction.”
However, as the COVID-19 pandemic hit, this optimism quickly turned to despair.
Already this year BuzzFeed has been forced to shut its already reduced Australian news office, as well as the UK equivalent.
“Both for economic and strategic reasons, we are going to focus on news that hits big in the United States during this difficult period,” BuzzFeed said in a statement at the time.
“Therefore, we will notify staff in the UK and Australia that we are not planning to cover local news in those countries. We will be consulting with employees on our plans regarding furloughs and stand-downs in these regions.”
But with FTI Consulting expecting a drop in online advertising sales to the sum of between 19 and 23 per cent, BuzzFeed is by no means an outlier.
In Australia, 10 Daily announced it was closing down entirely in May, citing “both short-term and long-term challenges and opportunities”.
Vice Media also announced it was culling five per cent of its global workforce earlier this year, despite the fact it is still on track to be profitable for the year.
Company CEO Nancy Dubac summarised the state of the global publishing in a letter to staff upon announcing the cuts.
“Publishing right now is difficult across the whole industry— plain and simple— and the pandemic has intensified the tensions we all know exist between publishing and advertising,” she said.
With the likes of Vice and BuzzFeed struggling at such a large scale, and 10 closing its unique publishing offering, a more consolidated media industry now seems inevitable.
And although it might be necessary for survival, Dubac argued it will be to the detriment of the media industry as a whole.
“The world has learned this before: monopolies are not a winning strategy for humanity,” said Dubac.
“It’s time we stand together as a media industry and address the serious issues that have slowly eroded the original promise of the Internet: a tool to bring society on more equal footing through knowledge and creativity unparalleled.”
