This week, as a long-predicted collapse seemed to hit digital media, we saw a few of the tried-and-true ways managers use to explain to employees why they’re laying them off.
BuzzFeed chose the language of corporation-as-family, with founder Jonah Peretti telling staff that making the decision was “upsetting and disappointing.” Verizon went with meaningless corporate-speak. “Today marks a strategic step toward better execution of our plans for growth and innovation into the future,” a spokesperson said.
The results looked the same in the end: a 15 percent reduction in headcount at BuzzFeed, resulting in the layoffs of more than 200 people, and 800 cuts at Verizon Media Group, which includes HuffPost and Yahoo News.
HuffPost went first. As always, journalists’ Twitter timelines filled up with the names of the newly unemployed—wow, they let him go? the whole opinion team?—and the usual ominous comments on the precarity of the industry.
“Precarity” might be underselling it at this point: As CNN reported, “the media industry lost about 1,000 jobs nationwide this week.” The national economy, meantime, is operating at close to full employment.
For an industry that has grown accustomed to layoffs, it all should have seemed like more of the same. And yet, the week felt more apocalyptic than usual. That’s because the “corrections” are coming for the digital outlets that were supposed to have been the survivors.
We already knew that local newspapers were near the bottom of their death spirals, running with skeleton crews as hedge funds bleed them dry. The legacy brands, including The New York Times, The Washington Post, and even the Los Angeles Times, are doing fine for the moment, thanks largely to the Trump bump and billionaire owners, but nobody thinks that’s a sustainable trajectory for industry growth. So that left BuzzFeed, HuffPost, Vice, and Vox, which weren’t exactly expected to keep growing forever, but which we hoped would make it long enough to hire us when we got laid off from Mic, Mashable, Gizmodo Media Group, or Vocativ.
What became clear this week is that if the digital natives do survive, it might not have much to do with newsgathering, which both investors and advertisers have recently discovered an allergy to. The hard-news bloodbath was particularly acute at BuzzFeed, which lost not only its health team and national news desk, but also the diggers behind a lot of the site’s national security coverage. The brands want to spend pennies to reach millions, and ensure that their ads never appear anywhere potentially controversial. News is not a pathway to that future.
The tech platforms, with their advertising duopoly, can “demonetize” videos that make people sad, and give brands the ability, which they increasingly take advantage of, to prevent their ads from appearing anywhere near political news. The old arrangement, where if you wanted your ads to reach Rolling Stone‘s prosperous young readers you had no choice but to subsidize Hunter Thompson calling the White House a den of thieves, did not survive the digital revolution.
The investors who pumped money into the new media companies now realize, as a few others quietly did back when they were investing that money, that with herculean effort and a few undisturbed years to find an audience, you can build, at most, a modestly sized and modestly profitable advertising-supported media company with no clear path to further growth, in a chronically uncertain industry. News for a time was a respectable, and respected, bit of polish, subsidized by everything else. Now that price is too high.
Readers, on the other hand, still love the news. The majority of American households are spending $50 to $70 per month for internet service, on top of $30 to $100 per line for mobile internet. They do so to have access to Netflix, pornography, and email, of course, but they are absolutely also paying to read the news. Tens of millions of people read BuzzFeed, Gizmodo, Slate, and The New York Times monthly—and every one of them that is not browsing at a public library, or stealing WiFi, is paying for the privilege. They’re just not paying the people who are making it.
So what is to be done for everyone who is still standing, short of hoping to be purchased by the carriers (which didn’t exactly save HuffPost)? Seeking money on absurdly inflated subscription rates works for The New Yorker, because The New Yorker is the One Magazine—the winner in a suddenly winner-take-all market. The Atlantic has a billionaire and New York is maybe in the market for one. The rest might be out of luck. The New York Times, the One Newspaper, can nickel-and-dime its national audience with separate subscriptions for recipes and crosswords, because it, too, is operating monopolistically. The Indianapolis Star, though, might struggle to find generous sponsors for any potential Ideas Festival.
Can subscriptions sustain a large and diverse media ecosystem—one already dominated by a few huge players that already charge subscriptions? How many newsrooms can we expect individual consumers to directly fund? It might work if, as BuzzFeed’s Peretti has already suggested, many of the players involved consolidate themselves. And then, so much for that large and diverse media ecosystem.
The solution, if we want to have a lot of media companies creating varied journalism, will probably have to come not from the entrepreneurs or consultants—who have shown no ability at all to create sustainable media businesses, nationally or locally—but through policy.
It is as though, during the golden age of the big city newspaper, the players in the media distribution system with the most power were the owners of delivery trucks. For years, the United States Postal Service subsidized the distribution of magazines and newspapers through preferred rates. Had it operated like today’s platforms or ISPs, readers would’ve had to pay the post office to get Esquire delivered, and the magazine’s publisher wouldn’t have seen a dime.
The platforms will have to be regulated and subsidies squeezed out of carriers. That is assuming, of course, that we want to save journalism from this cycle of consolidation and downsizing.
Readers do, I think. But this week has shown that they don’t always get their way.