The future of BuzzFeed is something that has divided media people for a decade. Its 11 international editions reach more than 200m unique users every month with a claimed 7bn global content views across social media. It is regarded by some as the lively, stylish upstart which is redefining news. Others have dismissed its long-term viability. But those doubts may be silenced with this week’s news that BuzzFeed is set to join Vice in the ranks of digital media companies bankrolled and leveraged by Hollywood.
Jonah Peretti (a co-founder of Huffington Post) started BuzzFeed 10 years ago this week as an experimental lab focused on tracking viral
content and, quite simply, creating stuff people wanted to share.
The MIT graduate’s obsession with the whole question of “What makes ideas spread?” started when, as a student, he ordered a customized pair of Nike running shoes with the word “sweatshop” written on them. When Nike repeatedly refused to fulfill the order, Peretti sent the email chain to a dozen friends, who forwarded it on; eventually, it reached millions of people. It was covered in the Wall Street Journal and on prime-time news. The idea of BuzzFeed was born.
Discovering SEO
In 2005, he joined editor-in-chief Arianna Huffington and former Time Warner executive Ken Lerer (now chairman of BuzzFeed) in the launch of HuffPost which was originally known primarily as a political blog. Huffington was the big personality upfront and Peretti was quietly focused on “content that would spread” which formed a key part of the site’s DNA. Happy to be in the engine-room, he was responsible for developing the celebrity gossip and trivia behind the front page of serious news and commentary. HuffPo was one of the first systematic users of SEO and spawned Peretti’s side project, experimenting with viral content – which became BuzzFeed. His technologies tracked items of content that were contagious, things that jumped from one person’s Facebook page to many others.
It wasn’t long before the fledgling site started to attract visitors, lots of them. He decided to raise investment funds when the site’s audience had reached 600,000 monthly uniques. But the New Yorker’s twin-track career continued for almost five years during which he struggled to keep the two jobs as separate and uncompetitive as possible. He was splitting time between the two offices, and his daily routine involved picking up 15 sandwiches at a Vietnamese shop between the two and feeding editors at each place. But it became increasingly fraught. “I thought Huffpost could be a media business and BuzzFeed a tech business which would avoid the awkwardness of both companies trying to hire the same type of people.”
He did not start hiring teams of editors and reporters until he left HuffPost after its purchase by AOL in 2011. But BuzzFeed had already been noticed. In 2008, the founder (whose five-person team then had a monthly cash “burn” of $60k) wrote a presentation that quoted news network CNN: “We looked at BuzzFeed and sensed the future”.
Peretti had designed his site as a “free, open platform for launching ‘buzz’ ”, and saw it as “a one-stop shop for web ‘buzz’: editorial, algorithmic, user-generated…able to dramatically grow traffic without hiring editors”. He predicted his fledgling media service would be “a global technology platform for a completely trend-centric type of advertising and media: the top outlet for every major brand that wants to grow buzz.” And, eight years ago, here was the first known reference to “native” advertising:
“BuzzFeed partners can publish and promote their buzz on the site. The promotion is native to the site and works as content and advertising. The BuzzFeed system dynamically places ads next to the hottest content. The future of the industry is advertising as content. Advertising and editorial content should have the same format.”
Ten years later, BuzzFeed has become one of the world’s largest news sites through its exploitation of distributed platforms like Facebook, and SnapChat to build huge audiences. Its 7bn monthly views (up from 2.8bn in the past 18 months ) are across 30 platforms, more than 60% of them for video. BuzzFeed has famously become big by publishing its mostly mobile content where people are, rather than forcing them to come to it. About 75% of its content is consumed outside its own platform, including 33% on Facebook, 21% on SnapChat, and 14% on YouTube.
The ‘secret sauce’
Jonah Peretti’s obsession with “spreading ideas” cannot disguise a laser-like focus on what it is that makes BuzzFeed special:
- Content marketing: BuzzFeed pioneered sponsored content among news providers and has helped it become a billion-dollar-value business. It simply understood – at least five years before traditional news companies – that branded content is a better business for digital media than banner and display advertising. Stories build relationships and make people care about brands more than than mere sales messages, which means that they can be premium-priced, by contrast with increasingly commoditised advertising.
- The news ‘subsidy’: Peretti always realised that – for all the talk about the post-digital reluctance to pay for news – the ‘front’ of daily newspapers had always effectively been subsidised by the readers and advertisers who supported the features, sport, business and leisure coverage at the back. BuzzFeed consciously uses “content” to fund its journalism in the same way. The increasingly strong public-interest journalism has boosted its reputation and has probably helped it attract higher-end advertisers not originally attracted to the diet of listicles, OMG and cuddly cats.
- Big data: Traditional media content companies are at war with data-driven tech companies. But BuzzFeed has always been both. It has used its investment cash wisely to build proprietary technology to help it understand content and how it functions on the web better than almost any company in media; the key to that understanding is data. It is the product of its highly analytical founder, and reflects his understanding of how and why content is shared and how to monetise it. BuzzFeed has always used data to drive its audience: it gives its writers the analytics to predict how content will perform and it routinely tracks the results.
- Advertising: Advertisers love BuzzFeed’s data-savvy, alongside repeatedly proving that sponsored content beats regular advertising for impact. An ability to combine targeted advertising with seemingly unrelated stories is also clearly part of the success. BuzzFeed sales people also suggest one type of content to increase brand ‘affinity’ and different approaches to improve purchasing intent. It is easy to see why many advertisers – torn between media and data – really do regard BuzzFeed as the best of both worlds.
- The brand: BuzzFeed has a distinctive tone of voice. Although most of its audience comes via social media, they know its content when they see it. But the company is also a thought leader in internet sharing, content marketing, and digital news. The founder and his team talk openly about their strategy and learnings. He is highly visible, accountable and part of the public dialogue over all things digital. That cheerful ‘2.0’ openness – contrasting with the anguished fight-to-the-death among many news providers – combines with BuzzFeed’s campaigning journalism to reinforce the image of a company that is doing good for the world. As Peretti says: “In an age when real journalism is hard to monetize, I believe that an important new form of corporate responsibility will be subsidizing investigative journalism that’s important for the public to see.”
Into the mainstream
BuzzFeed had once been a bit like HuffPost without the news and commentary. But, then, Peretti hired Ben Smith from Politico. It was a political age away but, in 2011, his new editor-in-chief broke the then US election news that former presidential candidate John McCain was
endorsing Presidential challenger Mitt Romney. It was a breakthrough moment as readers and commentators alike asked “What is a BuzzFeed?” That was the first political scoop for Smith, the star recruit.
BuzzFeed has now grown to 1,300 staffers worldwide, some 500 of whom are journalists: serious, newspaper-steeped as well as home-grown reporters covering everything from politics to long-form features, financial and international news. Its ‘legit’ journalism snowballed as Ben Smith recruited experienced editors from the Wall Street Journal, Rolling Stone, Gawker, the New York Times, the Financial Times, the UK Sunday Times, and The Guardian.
Last year, it stepped up its UK journalism with the appointment as editor-in-chief of Janine Gibson. As deputy editor of The Guardian, Gibson had been largely responsible for the Edward Snowden exclusives. She brought a new emphasis to BuzzFeed investigations in London. In an impressive first year, her team has exposed: match-fixing in professional tennis; scandal in Kids Company, a UK government-funded charity, and at RBS (a government-controlled bank); and an expose of working conditions at online retailer ASOS.
Some of these investigations have been profile-raising collaborations with the BBC, the public broadcaster that many UK newspapers waspishly regard as an enemy. During the country’s Brexit referendum campaign, BuzzFeed’s growing political credibility was burnished by its hosting of a Facebook debate involving Prime Minister Cameron and other party leaders. Make no mistake, it’s fast becoming mainstream media in a British market where the long-dominant national dailies are slowly suffocating.
Suddenly, it’s all Tasty
But, arguably, the most impressive demonstration of BuzzFeed’s strategic agility has been the explosive success of its recipe videos on social media this past 15
months. It all started with the Facebook-only Tasty cooking channel whose five Facebook pages now have more than 100m likes combined. Its videos regularly get tens of millions of views. In January, Tasty set the record for the most video views by any publisher in a single month, generating 3bn total video views across YouTube, Facebook, Vine and Instagram. Prior to that, the record was merely 1bn video views, also achieved by Tasty in October and December 2015.
The first month’s target had been 500,000 Facebook ‘likes’ in July 2015; it got 1.2 m. Tasty has succeeded because it is a world away from the idealised view of cooking on TV. It aims to create ‘relevant and realistic’ recipes for everyday people. The videos are short enough to hold viewer attention, but just long enough to tell a story and to become – because it’s BuzzFeed – content to share. The videos – which are between a half and two minutes long – are a simple combination of stop-motion shots, simple on-screen instructions, and colourful ingredients and cooking tools for young viewers who want accessibility more than gourmet cooking. The “hands and pans” videos are optimized for Facebook’s autoplay feature, which starts playing videos without the sound on.
Tasty has become the powerhouse of BuzzFeed’s Facebook video strategy, accounting for almost 40% of BuzzFeed’s total video views. More than 500 videos have been created so far, the videos have apparently accumulated some 15bn views and estimates that 25% of Facebook users view a Tasty video once a month. It may now be the largest ‘food network’ in the world, reaching 500m people every month – and still growing fast.
BuzzFeed has now launched Proper Tasty for British people who love ‘comfort food’. It was said to be the fastest-growing Facebook page, gathering 3.7m followers and over 190m video views in its first month, and 2.5bn views in the nine months since its UK launch.
Food is universally popular across all media but Tasty’s success is clearly due to it being made for Facebook and for the smartphone which dominates everything at BuzzFeed.
Tasty and Proper Tasty are also significant because they represent the first major steps in BuzzFeed’s strategy of publishing content directly to social media. The mastery of native advertising enables it to build revenues for this content without having to drive traffic back to its own website or rely on Facebook or YouTube to sell the ads: it is, literally, publishing not merely promoting on Facebook and SnapChat. This is win-win because Facebook’s algorithm favours not only video, but also content that lives natively on its pages and doesn’t redirect to another website.
The BuzzFeed cooking phenomenon has now launched in six countries and is expanding into different forms of content, including Tasty Junior (cooking with kids), Tasty Happy Hour and “Mum vs. Chef” – a nine-minute show about mums and chefs with a secret ingredient. And now Tasty is coming to TV.
Hollywood meets Silicon Valley
Four years ago, just months after Peretti left the now AOL-owned HuffPost, BuzzFeed attracted its first external investment, from Hearst Corp. Two years later, it raised another $50m, from Silicon Valley venture capital firm Andreessen Horowitz. In 2015, NBCUniversal injected $200m which valued the whole company at some $1.5bn. And, now, NBC (the TV-movie subsidiary of the Comcast cable giant) has disclosed it is negotiating a further investment of $200m, reportedly valuing BuzzFeed at $1.7bn.
As part of that 2015 funding, NBC’s Today breakfast TV show and BuzzFeed are already creating food content which is then being posted as one-minute versions to Facebook, Instagram and Twitter. The partners also worked closely together on bringing coverage of the Rio Olympics to young audiences via SnapChat. These joint ventures are now expected to accelerate, perhaps even to include a TV channel on the lines of Vice’s Viceland, launched with the Disney-Hearst-owned A&E networks. It is easy to see the BuzzFeed parallels with Vice as the digital tigers both seek to exploit the huge audiences and resources of TV broadcasters.
The latest planned NBCUniversal investment, which would secure BuzzFeed finances for the long-term, is being compared with Disney’s $400m
deal with Vice, and with other arrangements involving: Vox Media and NBC; Group Nine Media (Thrillist’s new holding company) and Discovery; and Refinery29 and Turner Broadcasting. As the women’s media Refinery29 boss said recently: “TV still has huge audiences, big-time ad money, and is probably one of the most efficient businesses that exist in media today.” For all the challenges posed for broadcasters, these partnerships recognise the power of TV and the strategic potential of combining mobile and broadcast to create the next generation of media winners.
For the millennial news companies BuzzFeed and Vice, these potentially game-changing deals may, over time, become reverse takeovers with the digital natives leading the broadcasters’ conquest of mobile viewing and those elusive millennial audiences. Having each invested $400m, the only question is whether it will be NBCUniversal or Disney which moves first to bid for full control of their respective digital partners.
Meanwhile, executives at NBCUniversal (which is expected to become a 30% shareholder in BuzzFeed) will want to listen to Peretti who has often taken shots at traditional media for its failure to understand what millennial audiences want. He has been outspoken about the way that older media players (like his new best friends) haven’t built anything like the data infrastructure BuzzFeed has, that not only shows how many people are watching its videos but also how audiences are engaging with them. That is why these deals might just signal the start of a major shake-up in screen entertainment with a whole raft of new-old media partnerships – including AT&T’s just-announced $85m bid for the Time Warner cable monolith.
‘Divide and conquer’
That’s the context also for BuzzFeed’s earlier announcement that it would divide into two divisions, News and Entertainment, in order to invest heavily in the future of video, which already represents more than 50% of revenue – a three-fold increase in 18 months, on its way to a forecast 75% within two years. “As digital video becomes ubiquitous,” Peretti told his team “every major initiative at BuzzFeed around the world will find an expression as video.”
He said: “In this new structure, video won’t be the job of just one department. Having a single ‘video department’ in 2016 makes about as much sense as having a ‘mobile department’. Instead, it will be something we expand and embed across the organization. As digital video becomes ubiquitous, every major initiative at BuzzFeed around the world will find an expression as video, just like everything we do works on mobile and social platforms. Instead of organizing around a format or technology, we will organize our work to take full advantage of many formats and technologies.
“We have an opportunity to be the leading entertainment company for the mobile, social age. And we are in position to build the the No.1 global news brand for a new generation who consume news differently than their parents, but care passionately about what is happening in a quickly-changing world. This structure will allow us to be better at entertainment and better at news. It will also complete our shift
to becoming a cross-platform media company, with entertainment and news both living on our site, our apps, and distributed on platforms across the web in multiple native formats. Our content is social and mobile first but our partnership with NBC Universal and our new UK studios is a nod to a possible connection between social and linear TV starting to work together. That’s happening right now and we’re actively pursuing that.”
Peretti’s explanation of video growth was appropriate but, somehow, almost irrelevant. He was really playing to the gallery of NBCUniversal directors who – as he was announcing the changes – were limbering up for their latest investment bid, now underway. Cynics say the BuzzFeed reorganisation was mostly about de-coupling the high-value Entertainment from News – for the benefit of investors.
A future separation?
It is now a question of whether BuzzFeed Entertainment and BuzzFeed News will eventually move even further apart, as the NBCUniversal relationship develops. These two divisions might quickly become quite separate in the eyes of viewers, advertisers – and investors.
No sooner had the divisional reorganisation been unveiled than BuzzFeed announced it had teamed up with Israel-based media giant Keshet International to launch a new cross-media version of TV game show “Touch”. It features the show and a mobile game in which players are shown a visual and are asked to point out the errors — i.e. an object in a photo that shouldn’t be there. The existing Israeli version allows people to play against the TV contestants on their phones or tablets, but anyone can play the mobile game on their own at any time. It could well become the next big BuzzFeed win across the world.
For all their vitality and high valuations, BuzzFeed (and Vice too) still struggle to get the respect of traditional media. CNN President Jeff Zucker wins some sort of ironic prize (eight years after his own company praised BuzzFeed as the future of news) by asserting in August this year: “I don’t think Vice and Buzzfeed are legitimate news organizations. They are native advertising shops. We crush both of them.” But then, last month, CNN poached BuzzFeed’s four-person political research team to bolster its own presidential election coverage. Oops.
Time Inc’s chairman Joe Ripp has been similarly dismissive. He claimed his own company had more native advertising revenue than BuzzFeed, which he slammed as one of the “digital attackers,” and “the shiny new thing for a while”. So the mighty American publisher is thrilled to boast – without any sense of irony – that it takes all its 100 magazines and 8,000 people to match BuzzFeed’s revenue.
The attitudes of traditional media executives (especially in newspapers) probably reflect their frustrated inability to monetise what have often become substantial web audiences. And that’s because they have grown up on a mass market diet of display advertising and the neat separation of editorial. That’s why so many newspapers are gritted-teeth contemptuous of BuzzFeed. In an online world of targeted ‘native’ advertising and all-you-can-know analytics, the old guys just don’t get it.
There will, of course, be more winners than just BuzzFeed in this area of “social news” – and who would bet against even more radical change from the networks (Facebook, Twitter, SnapChat, YouTube, LinkedIn et al) which feed the “buzz”? But many traditional news brands seem out of tune even with the digital habits of their remaining readers, let alone the younger ones they have long since missed out on. As Jonah Peretti has found, readers simply don’t object to content that interests them – whether it has been paid for by advertisers or has come from the keyboard of a journalist.
But it’s not all been plain sailing for BuzzFeed. After a 2-3 years of being more or less profitable, it was reported to have missed 2015 revenue budgets by as much as 30%. The Financial Times claimed that revenues last year had been $170m and that, instead of shooting for $500m in 2016, would “only” this year reach the $250m that had been budgeted for 2015.
The reports were denied but not clarified, although it would not be the only high-growth digital company to miss its forecasts in volatile times. But BuzzFeed is thought to have been profitable since it made $7m on $64m of revenue in 2013. Even if last year was disappointing, the revenue may still have been almost 50% ahead of the previous year. As if to reinforce the underlying strength of its newer operations, BuzzFeed quadrupled its UK profits to £558k ($677k) in 2015.
“News gets smaller “
But whether BuzzFeed will still be growing as a news-oriented service in another 10 years might depend on how far traditional providers come to recognise that “news” will be a much smaller business in the future – and plan to compete accordingly. More than ever, the traditional news brands need to “concentrate on the best and link to the rest” in order to become viable in digital media and to take the fight to BuzzFeed.
It is more than a decade since Apple’s iTunes changed attitudes by enabling consumers to buy the individual songs they wanted instead of having to pay for unwanted tracks on a whole album. The move signalled the rise of a no-bundling generation which (if they would pay for any content at all) would pay only for what they actually wanted. Newspapers, spoiled by decades of bundling it all together in print, chose not to change that even when online gave them the opportunity. But, now, the digital competition has shredded newspaper advertising revenues and given consumers free access to many elements of the news brand ‘bundle’.
Even in the UK where the country’s long tradition of national dailies is dying slowly (but dying, nonetheless) and 40% still read newspapers, only 5% pay for online news. The fact also that so many newspaper readers are migrating not to digital editions but to online news aggregators underlines the comprehensive change needed if these traditional news brands are to survive in any form at all.
The fact is that, even after years of blood-letting, many daily newspaper staffing levels remain too high. The persistent attempts to protect the outdated luxury of two major revenue streams is obscuring the search for viable new business models. The stubborn defence of print profits is obstructing digital innovation just as competitors like BuzzFeed soar through video, live streaming, virtual reality – and globalisation. Unsurprisingly, the compromised strategies of traditional news organisations succeed in starving them of the millennial audiences, without which many hardly now merit the description of ‘mass media’.
The expensive lessons and mistakes are everywhere and being repeated even by some of the news companies that are more digitally-active and are seeking to build a global footprint. So it is that the UK’s Daily Mail (perhaps second only to Huffington Post when it started using live analytics to create a digital news service) has succeeded in building a global audience of 229m monthly uniques – 70% outside the UK – but has yet to declare the profit that it last promised investors in 2012.
What still proudly claims to be the world’s largest newspaper web site may be paying the price for sticking too close to its print heritage. It has more than 800 journalists (almost twice as many as BuzzFeed) and has built a similarly large audience – but principally attracted by low-rent celebrity coverage. The contrast with BuzzFeed extends through the Mail seeking mainly to pull its readers to its own site (rather than shared across social media) and a sales emphasis – until relatively recently – on banners and display advertising rather than native content.
Among quality news brands, The Guardian’s global ambitions were distinguished by the Edward Snowden coverage which turbocharged its audience and reputation in North America. But even this UK-based news operation (which is owned by a UK not-for-profit trust) is now under pressure. It is difficult enough to contain digital investments. But The Guardian’s sliding print operations have also been consistently unprofitable.
These beleaguered operations have produced a cash out-flow of some £200m over the past two years. Even The Guardian’s digital revenues have been declining. Now, it is having to cut costs by at least 20% over the next three years, including at the relatively new digital operations in the US and Australia. While The Guardian’s survival is under-pinned by spectacular capital gains from ancillary media investments, the whole scale of its global ambition is clearly at risk.
It’s a strikingly similar story at the New York Times where the company’s stock-market exposure is mitigated by supportive individual and family shareholders: it has reported a second consecutive loss making quarter this year. But the famous city newspaper – which has successfully become a national daily in the US over the past five years – has almost 1.5m digital-only subscriptions for its news products, including a notable 300k for its daily crossword puzzle. However, both digital and print advertising revenue have been falling, which are providing strong headwinds for the investment plans in its International Edition (once the International Herald Tribune).
And the New York Times’s rising US competition comes in the shape of Amazon founder Jeff Bezos, who bought the Washington Post because he wanted “to make it into a more powerful national — and even global — publication, and that The Post was well situated to be a watchdog over the leaders of the world’s most powerful country.” America’s two best-known dailies each attract some 60-70m monthly uniques. Bezos has been investing heavily in technology and also in BuzzFeed-like multi-platform strategies. It is a fair bet either that the Washington Post will acquire an international “sister” news brand (the UK’s strong but sagging Daily Telegraph?) or that the fierce domestic competition will anyway constrain the New York Times’s global ambitions.
News Corp stands back
Despite the seemingly obvious appeal of a global news service embracing The London Times, The Australian, and the Wall Street Journal, Rupert Murdoch’s News Corp looks increasingly unlikely to do any such thing. His most profitable newspaper, The Sun, has recently been talking up how the tabloid’s “uniquely British identity” will be stamped across its digital and print operations: “We have come to the conclusion that we should focus really heavily on the UK first of all. Let’s get that sorted out. Before we go massively outwith our borders, let’s understand what it is we are going to go with.”
The strong domestic strategy – which could, ultimately, disrupt the Daily Mail’s celebrity-led digital operations in its home base – was endorsed by News Corp’s shrewd acquisition of the Talksport radio group: tabloid, talk radio and sport are clearly a great fit.
News Corp’s apparent reluctance to launch a BuzzFeed-scale “quality” news service may have been based not so much on the competitiveness of Huffington Post as on HuffPo’s evident inability to become profitable.
It had once seemed so different. HuffPo was launched in 2005 and – five years later – the site generated nearly $31m in revenue but made a profit of less than $1m. That was the breakthrough result that led to the AOL acquisition in 2011, the year it was expected to double
revenues, to $60m, with profit expected to rise to $10m. Even that result would have made AOL’s purchase price more than 30 times HuffPo’s projected profits. Arianna Huffington asserted that the company’s revenue/ profit would surge to $115m/ $36m in 2012, and to $203m/ $73m in 2015. But it just didn’t happen.
The very year AOL bought the HuffPo may actually have turned out to be its only profit. Ever since, AOL has unconvincingly said it “would be profitable” if not for the dramatic international expansion. But the company, which had once been a role model for digital news, came to look like a story of two show-off brands: Huffington Post and Arianna Huffington herself.
While HuffPo still has among the most Facebook likes, shares and comments of any publisher, BuzzFeed took viral news to a new level even before it moved on to other online conquests. HuffPo itself was certainly a pioneer and, perhaps, even invented native advertising before BuzzFeed raced with it. But it has since fallen back and even the HuffPost Live streaming operation – seemingly ahead of its time – never really worked.
Huffington out of time?
The whole business has lost US traffic, been eclipsed (especially among millennials) by BuzzFeed and even been almost caught by the New York Times and Washington Post. Digiday was moved recently to publish what read like an obituary: “In an era of focused media, the Huffington Post houses more than 60 sections under its banner. Among its more obscure ones are Divorce, Good News and Quiet Revolution, for introverts… it publishes 1,500 pieces of editorial content a day across its global network. That’s more than six times the pieces of content that The New York Times and BuzzFeed each publish daily.”
That is part of what makes HuffPo an antiquated force in the fast-changing digital market for news, a place to get a lot of variety but nothing special: a generalist in a world of focus. It had effectively become a portal of news and is now struggling to survive in an era when such things have been replaced by social platforms like Facebook, SnapChat, Twitter and LinkedIn.
In 2015, AOL (with HuffPo) was acquired by US telco Verizon which is now also buying Yahoo. And Ms Huffington has left the company. AOL’s promotion of Huffington Post and video ‘stories’ site Makers, “together reaching over 500m global consumers”, unwittingly underlines the reality of a one-time digital giant which has lost its identity in a corporation that has moved on.
So, with Huffington Post on the ropes, can BuzzFeed become the long-term global leader in digital news?
BuzzFeed is a media company to its customers but a techie where it matters, and that is in its quest for perpetual change and innovation. All Silicon Valley winners know they must build a business model and then break it apart before someone else does. Once again, BuzzFeed is well ahead of the curve with its branded video. Tasty is huge with much further still to go: if ever there was an online category capable of ripping out the heart from TV advertising (still the ultimate prize for digital media everywhere), food is it.
Then there are the tests with e-commerce dating back to a 2014 L’Oreal campaign with “buy” buttons in a sponsored post. And then there are those first tentative video packages on iTunes: When BuzzFeed unveiled its new series “You Do You,” it shot to number one in the iTunes store — making it more popular than err the Kardashians. What is more intriguing is that these videos are priced at $2.99 per series, the first time BuzzFeed has charged for any content.
It has come a long way from clickbait through hard news and entertainment, short-run video through social media on smartphone, and now is stepping (gulp) into TV. Peretti has brought brands and content powerfully together. While it’s all work in progress and the ‘land grab’ to become a truly global operation has some way still to go, the new NBCUniversal deal could secure the company through to expected steady profitability in 2-3 years.
Two years after a $500m bid from Disney was rebuffed, the latest NBCUniversal investment (assuming it is completed) may change many things about the future of BuzzFeed and not just its exposure to Hollywood. It will remove any doubt about the company’s ability to continue its global conquest, and eliminate talk about a possible IPO in 2017. But the speculation is only beginning about whether BuzzFeed will end up driving NBC television – or the reverse. That’s the nature of investments when the wealthy incumbent strikes a cross-culture deal with the gutsy insurgent, for the sake of the future.
Just watch how involved Jonah Peretti gets in broadcasting-streaming-movies. The whole media and entertainment marketplace might open up for BuzzFeed in partnership with NBCUniversal. This could be a revolution for both of them.
Before those inevitable ‘who controls what’ tussles, though, there will be plenty of speculation that the two divisions of BuzzFeed will increasingly become estranged. NBCUniversal would be focused on maximising the “entertainment” value and other suitors may emerge for the “news”, perhaps even from Europe.
Axel Springer’s CEO Mathias Döpfner has acquired Business Insider as part of his good-so-far strategy to transform Europe’s largest news publisher. He is the born-again newspaper editor who has characterised traditional media as being in a race to acquire technology-data skills before tech companies get cool with content. Enter Huffington Post co-founder Ken Lerer. In addition to being chairman of BuzzFeed and an esteemed tech-investor, Lerer is now an adviser to the same Axel Springer – and a collaborator with Döpfner in Group Nine Media. He might just have some thoughts on BuzzFeed’s role in the future of global news.
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