Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Turmoil At BuzzFeed, Vice Signals Crisis In The World Of Free Digital Media

Turmoil At BuzzFeed, Vice Signals Crisis In The World Of Free Digital Media

BuzzFeed, one of the OG new media disruptors, announced in late April that it would shutter its news division. Translation: 180 jobs lost.
With the closure of BuzzFeed News and bankruptcy looming at Vice, the once promising world of free digital media finds itself at a crossroads, seeing ad revenues dry up at the same time as disappointed investors begin walking away.

BuzzFeed, one of the OG new media disruptors, announced in late April that it would shutter its news division. Translation: 180 jobs lost.

As for Vice, the company -- once a darling that attracted major funding from Disney and Fox, among others -- has canceled its signature show Vice News Tonight, laid off 100 people, and is reportedly on the verge of declaring bankruptcy.

The two media groups have different profiles and goals, but one thing they have in common is a reliance on advertising dollars to fund their operations.

But in tough economic times, advertising is one of the first things to go, and tech giants now account for 70 percent of all digital ad revenues, with Google and Facebook leading the way.

"I think the free model -- trying to build high volume, and then sell ads on that basis -- hasn't worked out nearly as well as hoped," says Rick Edmonds, a media business analyst at the Poynter Institute, a non-profit journalism research organization.

Ben Smith, the onetime editor-in-chief of BuzzFeed News, is more unequivocal.

"It's the end of the marriage between social media and news," he told The New York Times.

At the start of the 2010s, Vice and BuzzFeed -- along with the Daily Beast and the Huffington Post -- were the standard bearers of a new generation of media outlets that were completely online and ready to battle the traditional purveyors of news.

The model quickly seduced investors.

"These outlets expanded way beyond their capacity, because they were attracting an enormous amount of venture capital," says Dan Kennedy, a professor of journalism at Northeastern University in Boston.

"Venture capitalists told themselves a fairy tale, which was if Vice and Buzzfeed News and all the rest are going to generate this much traffic, there must be a way to monetize all that traffic."

In 2017, Vice Media was valued at $5.7 billion -- more than the market capitalization of The New York Times at the time.

But when progress is slow in coming, investors "get impatient," Edmonds says.

'Hard sell'

As interest rates rose over the past year, tighter lending conditions have made venture capitalists more tight-fisted, and "everybody called in their chips," explains Aileen Gallagher, chair of digital journalism at Syracuse University's Newhouse School of Public Communications.

Vice and BuzzFeed had already struggled to attract new investments for several years and were forced to resort to taking on debt to stay afloat. Neither was turning a profit.

Fortress Investment Group, Vice's main creditor, could take the media company if it declares bankruptcy, according to The New York Times.

In 2021, BuzzFeed went public, but the move quickly proved disastrous -- the company, once valued at $1.5 billion, only raised $16 million.

In this tumultuous environment, free news websites attached to major groups like Vox (Vox Media), Mashable (Ziff Davis) and The Daily Beast (IAC) have fared better, helped in part by economies of scale and majority shareholders with long-term vision.

BuzzFeed was searching for such a set-up in 2020 when it bought The Huffington Post, which remains part of its group and is even profitable, although with a much smaller footprint than in its heyday, according to CEO Jonah Peretti.

Free media sites are the most exposed when the economy is tight, and many of them -- including NPR, The Washington Post and CNN -- have proceeded with layoffs.

Others, like The Daily Beast, have tried to transition to a paywall model, but for Edmonds, "that's a fairly hard sell to news consumers, particularly if it's a brand they've gotten used to having free."

"You have to really care about something to subscribe to it," Gallagher points out. "There's a lot of middle ground content in the digital world that doesn't have a lot of value. And I think that's the kind of stuff that's going to disappear."
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Man Convicted of Fraud After Booking Over 120 Free Flights Posing as Flight Attendant
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Beata Thunberg Rebrands as Beata Ernman Amidst Sister's Activism Controversy
Hungarian Parliament Approves Citizenship Suspension Law
Prime Minister Orbán Criticizes EU's Ukraine Accession Plans
Hungarian Delicacies Introduced to Japanese Market
Hungary's Industrial Output Rises Amid Battery Sector Slump
President Sulyok Celebrates 15 Years of Hungarian Unity Efforts
Hungary's Szeleczki Shines at World Judo Championships
Visegrád Construction Trends Diverge as Hungary Lags
Hungary Hosts National Quantum Technology Workshop
Hungarian Animation Featured at Annecy Festival
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
UK and EU Reach New Economic Agreement
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
UK and EU Reach Agreement on Gibraltar's Schengen Integration
Israeli Finance Minister Imposes Banking Penalties on Palestinians
U.S. Inflation Rises to 2.4% in May Amid Trade Tensions
Trump's Policies Prompt Decline in Chinese Student Enrollment in U.S.
Global Oceans Near Record Temperatures as CO₂ Levels Climb
Trump Announces U.S.-China Trade Deal Covering Rare Earths
Smuggled U.S. Fuel Funds Mexican Cartels Amid Crackdown
Austrian School Shooting Leaves Nine Dead in Graz
Bezos's Lavish Venice Wedding Sparks Local Protests
Europe Prepares for Historic Lunar Rover Landing
Italian Parents Seek Therapy Amid Lengthy School Holidays
British Fishing Vessel Seized by France Fined €30,000
Dutch Government Collapses Amid Migration Policy Dispute
UK Commits to 3.5% GDP Defence Spending Under NATO Pressure
Germany Moves to Expedite Migrant Deportations
US Urges UK to Raise Defence Spending to 5% of GDP
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Low Turnout Jeopardizes Italy's Citizenship Reform Referendum
Transatlantic Interest Rate Divergence Widens as Trump Pressures Powell
EU Lawmaker Calls for Broader Exemptions in Supply Chain Legislation
France's Defense Spending Plans Threatened by High National Debt
European Small-Cap Stocks Outperform U.S. Rivals Amid Growth Revival
Switzerland Proposes $26 Billion Capital Increase for UBS
×