In a move that reflects a broader trend among media companies across the board, BuzzFeed recently announced a formal divide between its news and entertainment arms.
Although these kinds of announcements have of late been a death knell for the news side of media companies, both Ben Smith, Editor-in-Chief, and Jonah H. Peretti, BuzzFeed Founder, continue to assure the news staff that they’re very much a needed and wanted part of the long-term plan for BuzzFeed.
Video Represents Revenue for BuzzFeed
Now that video represents more than 50 percent of BuzzFeed’s revenue (up from 15 percent in 2014) and video’s share is expected to grow to 75 percent within the next two years, it only made sense to the company to expand its capability into every area of the company rather than keeping it all in one section. Under the new structure, BuzzFeed News will be led by Smith in New York and Los Angeles-based Ze Frank will oversee the new BuzzFeed Entertainment Group.
Despite continued reassurance that news is still very much a focus of the BuzzFeed brand, there’s a great deal of speculation to the contrary. Emily Bell, director of the Tow Center for Digital Journalism at Columbia told the New York Times that “we’ve seen in legacy organizations the splitting off of what might be deemed to be less profitable news and more profitable entertainment divisions. If you were being very positive, you might say perhaps they’re going to find a way to make news sustainable in the long term.” She added, “What this underlines in a way is what everybody else is experiencing, which is that high-quality news can make money, but it’s a real struggle.”
BuzzFeed’s Resource Allocation
Indeed, the Financial Times has reported that BuzzFeed missed its revenue target for 2015 and halved its projections for 2016, but BuzzFeed insists its internal shuffle has nothing to do with profits. Instead, it would seem that the move was an attempt to improve resource allocation, ease reporting and help sooth some frustration between Smith and Frank, who have been known to annoy one another professionally.
Although it remains to be seen what impact BuzzFeed’s new divisions will have on its profitability or ability to attract interest and eyes, this move may well help ease the strain of managing the over 1,300 global employees who came on board during a chaotic growth spurt. Reorganizing may indeed streamline processes at BuzzFeed, ushering in a new era of growth for the company.