Why Vice Buzzfeed and Vox Rue 2018 - koeppeldirect.com

Why Vice, Buzzfeed and Vox Rue 2018


Digital publishers like Vice, Buzzfeed and Vox are starting to feel the strain that traditional media outlets have been experiencing for at least two decades.

The big guys are getting most of the ad spend from marketers, making it increasingly difficult for the smaller outlets (by comparison) to maintain profitability and quality for the dollar. With Facebook, Google, and now Amazon, together capturing over 60 percent of online ad spend in 2018, there just wasn’t a lot left for everyone else to split.

Doing More with Less

Because of the current state of digital marketing and the same pressures that traditional media outlets deal with day in and day out, Vice, Buzzfeed and other new media outlets have had to make some really tough calls.

For Buzzfeed and Vice, it meant announcing labor cuts. Vice is shrinking its staff by 250 jobs, or about 10 percent. BuzzFeed is also cutting 250 jobs that represent 15 percent of its workforce.

Other new media outlets, like Huffington Post and Yahoo! News will see even greater losses, according to reporting by The Wall Street Journal.

Online traffic has simply stopped growing. There was always a top limit to how many hours a person could spend in the virtual world, and a limit on how many people there were to do so. This will ultimately result in consolidation across the board, with the more effective players absorbing the promising, but less effective, sites and publications.

No More Funding Rounds

Despite there still being healthy interest in the digital media sector from investors, players in the field are saying no to future funding rounds. What they discovered, much to their shock and horror, is that funding rounds come with strings attached. Now that the advertising marketplace is kind of tied up, those digital publications that used funding rounds to raise their capital are really stressed.

Not only are they seeing their growth shrinking (or their actual value falling), investors are beating down the doors wanting to know why their investment isn’t doing better. For Buzzfeed, reducing costs means shedding some of the pressure from investors, as CEO John Peretti explained in an interview with The Wall Street Journal, saying that a reduction in overhead will allow the media company to “thrive and control our own destiny, without ever needing to raise funding again.”

Unlike traditional media that not only face falling values, but an ever-shrinking audience as their demographic continues to age and more traditional subscribers pass away, digital media has the potential to attract new audiences that are always moving through that space. Things may look bleak for these media companies today, but they’re not going the way of the local newspaper any time soon.


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