The Rise and Fall of BuzzFeed and VICE in Digital Media

Buzzfeed and Vice were the digital media unicorns of the 2010s. In this fast emerging era of social media, smartphones, and video, these two companies had seemingly figured out the secret sauce on how to go viral in this new online world. They were fast, nimble, and hungry. Free from the bureaucracy, editorial norms, and newsroom traditions of legacy media. They covered taboo topics, wrote for relatability rather than prescription, published without pay walls or regge walls, and reinvented content from static text into dynamic interactive social pieces. It was free content delivered at an unprecedented pace, volume, quality, and swagger. And their regular virality fueled organic distribution to millions around the world. Backed by flourishing viewership,

Buzzfeed and Vice fundraised their way to multi-billion dollar valuations using the investment to elevate production value, expand genres, and build newsrooms of their own. As these startups expanded into journalism, the line that once divided legacy media and digital media vanished. Buzzfeed and Vice soon started collecting Emmys and Pulitzers for their work. The viewership, quality, and virality was visible, and it wasn't hard for the public and venture capitalists to imagine that BuzzFeed and Vice had become for millennials what the New York Times and CNN were for boomers. Brandon advertisers, who were eager to sell to this new generation, began diverting spend away from these legacy publications and towards these red-hot digital media startups. Vice and

BuzzFeed led the way, but there were also smaller startup like Vox, Thrillist, and Business Insider who surged off these same tailwinds. Everyone assumed that the business would take care of itself. No one had ever had this many eyeballs before, and with so many impressions to sell to advertisers, profit would simply be a matter of when and not if. Their founders proclaimed that they were trailblazers with no comparables. They had none of the overhead of legacy media. There were no printing presses, and they didn't have to physically throw their content in front of people's doorsteps every day

just to get readers. And best of all, they didn't have any aging unionized workforces. They asserted that digital media was a new type of business with its own fundamentals where all the consumption, distribution, and creation would be entirely online. Media tycoons like Disney's Bob Iger and Fox's Rupert Murdoch had all heard the tales from Silicon Valley about disruption. The news had served as the foundation to their business empires, and the risk of extinction in a digital world was too great to sweep under the rug. Advertisers were already moving away from print and towards social media and digital media. Consumers were cutting the cord and signing up for Netflix. If this same advertiser exodus was to

happen with television, then Disney and Fox would both lose their golden geese. Disney invested $400 million for 10% in Vice, offered to buy BuzzFeed for $650 million in 2013, and then when rejected, offered to buy Vice for $3.5 billion 3 years later. Yet, for the founders of Vice and Buzzfeed, their calculus was simple. Why sell for a couple hundred million today when you could be a billionaire tycoon for the next generation? Fast forward just 10 years, and BuzzFeed today is a penny stock. Their viewership and readership are at record lows despite developing hit brands like Tasty and breakthrough shows like Hot Ones. Vice, on the other hand, declared bankruptcy in 2023. They've both laid off staff and cut back on

content, and the same has been true for Vox and Business Insider. Many people have pointed the finger at mismanagement, greed, and venture capital. Former employees have all insisted that the company simply did too much too fast. But the reality on closer look is that no one else has been able to figure out how to run a sustainable media business without subscriptions. You just can't give away all this content at scale for free. While irresponsible spending accelerated their demise, Buzzfeed and Vice at their core are really more like driftwood. They were trapped in this volatile landscape of online advertising and social media where they were initially beneficiaries, but then soon had the rug pulled out

under them in many different ways. At the end of the day, BuzzFeed, Vice, Vox, and Business Insider are not platforms. They're publications. No different from the Time magazines, Reader's Digests, Men's Journal, or People magazines that you saw as a kid at grocery stores or at doctor's offices. Publishing has been a tough business even before the invention of the smartphone. While moving everything online has eliminated certain costs and made access significantly easier, it still doesn't solve the cost of distribution and content creation. It's not just the digital media startups that are hurting. When we look at the rest of the landscape, the legacy publishers are not fairing any better.

They're not losing as much money as BuzzFeed, but they're also not doing any good business as their earnings and profits are all trending down year after year. Every leader is being forced to find answers in an endless storm, but there are only so many options available. They repeat the same tactics at different times and still end up with the same results. When no one else has really figured it out, there's not a single decision where you can sit back and critique and say Buzzfeed advice could have done this to save their business. The real question is, how could so many hit shows and millions of views be worth so little? In this episode, we're diving into BuzzFeed and analyzing the other players in the publishing landscape like People,

Business Insider, IGN, PC Mag, and Time Magazine to understand where it all went wrong. What does the future hold in business? Ask nine experts and you'll get 10 answers. Tune in to any news program and you'll see talking heads every day proclaiming that a recession is just months away, that tariffs will be eventually repealed, and that now is a good time to buy the dip in American stocks. Could someone please invent a crystal ball? Until then, over 41,000 businesses have futurep proofed their business with Netswuite by Oracle, the number one cloud ERP, bringing accounting, finance, inventory, and HR into one fluid platform. With one unified business management suite, there's one source of truth, giving you

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These are capabilities that only Netswuite provides and it's a platform that we intend to take every advantage of. Whether your company is earning millions or even hundreds of millions, Netswuite helps you respond to immediate challenges and seize your biggest opportunities. Speaking of opportunity, download the CFO's guide to AI and machine learning at netswuite.com/modern MBA. The guide is free to you at netswuite.com/modernba. netsweet.com/modernba. The rapid emergence of BuzzFeed, Vice, Vox, and Business Insider through the 2010s can be attributed to multiple paradigm shifts. As online only publications, they were in the best position to capitalize on them. The first was the evolution of Facebook as a distributor. In the 2000s, Facebook had positioned

itself as a social network where the main use case was for people to stay upto-date with the people that they already knew. The value of the platform was dependent on their personal network. As Facebook opened up, the user base grew, but homepages remained filled with low stake status updates and photo albums. If Facebook was to grow as a business, it needed to improve its value to advertisers, and the only way to do that was to increase user engagement. There needed to be something more dynamic, reoccurring, and interesting for people to do beyond waiting around for birthday reminders and life events.

By the late 2000s, the goalposts at Facebook had swung from account creation to session duration. People now needed to be spending as much time on Facebook.com as possible. In terms of online recreation, their biggest rivals at the time were the browser flash games, the cat videos of YouTube, and the web discovery websites like Stumble Upon. Zuckerberg was eager for engagement, but also shrewd enough to let others do the work for him by following what Apple had done just a few years prior with the App Store on the iPhone. He generously opened up Facebook to developers in the late 2000s. The most successful was Zinga, who combined their exclusive access, Facebook's user data, and proven game mechanics to create Farmville. Engagement exploded as

users were incentivized and prodded to visit Facebook multiple times a day to water their plants and feed animals. Farmville was so successful that other developers copied its formula and the platform was quickly swarmed with copycat games that all employed the same mechanics. Even though people were spending more time than ever on the platform, the engagement was happening inside the games. Most of the value was being captured by these outside developers rather than Facebook. At the same time, all these games ran on Adobe Flash, which was a poorly maintained proprietary technology that had no future on the mobile web. The second was user experience. It was no secret that

these games got their adoption and engagement by spamming posts and notifications. So, while the games thrived, the platform suffered as feeds became congested with automated spam. Without tools for good userenerated content, the only things left in people's Facebook feeds to look at were either copypaste memes or external links. But Facebook had got to where it was on the premise of quality. There was a reputation they had to uphold in the everpresent race against MySpace and Twitter, turning the website into a social game portal and allowing user feeds to languish, but only push away the quality users that they had so carefully cultivated. By the early

2010s, Facebook had moved away from social games. They promised higher quality, useful, informative feeds for all and would directly push relevant external articles and videos into every user's feeds. The evolution from social network to social media was now underway. Like they had done with developers just a few years before, Facebook rolled out the red carpet to publishers new and old, from BuzzFeed to the New York Times. Facebook would now gladly push their content, even as external links, for free to their global user base. And these publications could now even publish their articles directly on Facebook.com by meeting consumers where they already were. Publishers in theory would save on the cost of SEO,

customer acquisition, and page optimization. It was now no longer up to individuals to manually share articles one at a time on social media. Facebook was now the willing and eager distributor for over a billion people with no way for any one user to opt out. They had the best digital real estate, second only to Google, and the walled garden had opened its doors. It was a marriage that promised to solve problems for both sides. Facebook's problem was supply side and not having the quality content needed to keep people on the site, and publishers were struggling with demand and getting more eyeballs on the content that they were already producing. Zuckerberg pitched the big legacy publications, promising majority

revenue share for their efforts. and to build tools that would help them sell their existing subscription plans directly to users within his platform. He also wooed smaller publishers, promising fair, merit-based distribution for all. Facebook's algorithms would ensure that the cream would rise to the top. As long as enough people shared, commented, and engaged, then your piece of content could go viral without ever needing to pay for those views. Any media was good media, and all these publishers would collectively make up for the absence of quality userenerated content on the platform. Interestingly

enough, it would be the same over reliance on external content that would give Snapchat and then eventually Tik Tok the opening to surpass Facebook years later. Buzzfeed was the greatest beneficiary of this change. They deviated from the norm by writing entertaining casual content made exclusively for this new social media world in quizzes, numbered lists, and articles that had more pictures than text. All the content was by design easy to digest and even easier to share. Thanks to the millions of free eyeballs that Facebook was throwing their way, Buzzfeed quickly established itself by the mid2010s as the publication for young adults, college students, and teenagers looking to kill time online.

But the chickens soon came home to roost. In the pursuit of maximizing ad revenue, Facebook had prioritized engagement above all else, and marketers had studied its algorithms long enough to understand how to engineer virality on the platform. Controversial and provocative content was rewarded for driving engagement, and greater amounts of clickbait, misinformation, and fake news were pushed directly to unsuspecting feeds. But to Facebook, any engagement was good engagement, and the company turned a blind eye to keep the billions flowing. By 2016, Facebook was getting publicly hammered for enabling the Cambridge Analytica scandal, allowing foreign interference in multiple presidential elections, spreading misinformation, and being lax

in moderation. In the same year where Zuckerberg was being criticized for not doing enough, Buzzfeed and Vice had surged their record valuations propelled by the seemingly infinite streams of free social media traffic. Like every other publisher, they never once imagined that Facebook would actually turn off the golden spigot. The scrutiny on Zuckerberg got so intense that the juice was no longer worth the squeeze. For the amount of reach and influence that Facebook now had, they could no longer claim ignorance or shift responsibility back onto publishers. Suddenly, Facebook was publicly tasked with the added responsibility of moderating not just for safety, but for truth, which was a line that got blurred

when juggled with demands from advertisers, brands, and various world governments. The cost of distributing media now clearly outweighed the benefits of user engagement. With the strength of its subsidiaries in Instagram and WhatsApp, Facebook was also no longer as desperate for engagement. The platform itself was fully mature. The younger generations had shifted over to Instagram, Snapchat, and Tik Tok, and publications had no place in these short form video and photo platforms. The publishers were all now expendable, and Zuckerberg was free to pursue bigger dreams like the metaverse. And in 2018, Facebook suddenly turned off the spigot. They announced that all user feeds would now prioritize updates from friends rather than professional content from brands

and publishers. This rug pull resulted in a direct drop in traffic for every publication, as their biggest source of referral behind Google seemingly evaporated overnight. Consumers now had to leave the platform and seek out the content rather than wait to be served it like before and this drop in traffic led to a decline in ad revenue across the board for all publishers. The online only digital media startups were ultimately hit the hardest. The other paradigm shift that gave digital media startups their rapid growth in the 2010s was the inability of legacy publishers to evolve from print to digital. There was never that much money in publishing even before the smartphone and in the

era of print. We can see that in the fundamentals of the prestigious name brandand publications like Time magazine, Entertainment, Fortune, Sports Illustrated, and People magazine. All of these publications had been consolidated under one corporation under the goal of driving better margins and greater deal sizes. With such diverse readership, they would now be a one-stop shop for brands looking to hit a variety of demographics. But Time Warner's publishing division, even in its heyday before social media and smartphones, had middling operating margins that were forever stuck in the teens. Yet, in the same time frame, the cable division enjoyed record profits year after year,

even though all of these magazines charged readers upfront for access. The reality is that they still made most of their money through advertising rather than subscriptions. But when the iPhone was introduced in 2007, Time Warner's publishing business began to falter and has since never recovered. Their leaders believed that all they had to do in this new age was to simply offer the same subscriptions online. Their assumption was that readers, brands, and advertisers would repeat the same patterns online as they had done offline for so many decades. They expected competition, but never imagined that their challengers would be giving away so much content for free, especially at

the quality and volume of Buzzfeed. All of these digital media startups had placed their chips on a fundamentally different business model. Their collective belief was that they could be profitable off advertising alone. The rationale was that without the cost of physical delivery and printing presses, they would never need to charge for subscriptions. And since ad revenue is a function of eyeballs, if they were to block access based on payment or registration, that would only reduce the number of eyeballs and the amount of dollars in the long run. Thus, while Time Warner continued to push memberships and print into the 2010s to maintain their older audience, these

startups flourished in the same period, filling the void that was left behind by the legacy publications with their free content. While subscriptions remained fairly resilient for the legacy publications, their biggest impact was in ad revenue. Running a single page ad in the Time magazine would cost hundreds of thousands of dollars alone in placement. And in comparison, anyone could make a Facebook ad in minutes for as low as $1 a day. Brands and marketers flocked to social media, which offered radically cheaper ads, self-service options, measurable impact, and precise targeting all out of the box. Without the baggage and bureaucracy of the print publications, Buzzfeed, Vice, and the

other startups were able to build the tools and analytics that the brands and agencies were looking for in this new online frontier. Yet, television remained impervious to these changes. While the publishing business regressed, Time Warner's cable division continued to grow to record earnings. By the early 2010s, the once reliable publishing division had become such a liability that the company leaders were ready to abandon it. Its profits were lower than even that of the Hollywood motion picture business. To get rid of the Deadwood, Time Warner spun out its publishing division as its own independent entity, where in theory it could be more agile and focused on turning things around. But despite their

best efforts to match BuzzFeed's throughput and to cut costs down to the bone, the now independent Time magazine still could not stop the drop. Operating margins plummeted year after year to record low single digits and eventually turned negative. Ironically, it was the income from subscriptions that kept the company's lights on for as long as they did. If they were somehow an advertising only business without subscriptions, Time Magazine would have only lost greater amounts of money at a much earlier stage. The only independent publisher operating at scale in this day and age that's not part of some massive media conglomerate and whose profit margins are actually increasing and not

decreasing year-over-year is the New York Times. They've achieved that by shifting their business from being advertising ccentric to subscription ccentric and that income has enabled them to thrive in periods of downturn. The ad market at its core is seasonal and cyclical and the deal sizes, flow and interest will always be out of the hands of the publishers and content creators. Subscriptions serve as an invaluable hedge and provide reoccurring stable upfront revenue where the company gets compensated to deliver content. In contrast, Buzzfeed, Vice, and digital media startups all thumb their nose at subscriptions as outdated, unnecessary, predatory monetization tactics of the

past. They simply created content and assumed that there would be sufficient monetization opportunities after delivery. Ultimately, if you want to survive as an online publisher or a content creator, there are really only two proven options. You either stay small like most influencers, or you charge subscriptions on top of advertisements. Advertising with or without Facebook's free traffic will simply never be enough at scale, as we'll soon see later with BuzzFeed's business post IPO. Ironically, the New York Times was criticized through the 2010s for clinging on to subscriptions and paywalling their content. But as it stands today, 10 years later, they had been right the entire time. The third and final paradigm shift through the

2010s that allowed BuzzFeed and other digital media startups to flourish was the shift to video. The cable networks historically had been the gatekeepers for video for consumers and publishers alike. Consumers needed to buy cable and DVDs to access video and publishers were dependent on the cable networks to distribute their content. As smartphone adoption and cellular technology matured, it now became possible to watch highresolution videos on the go through the internet and for the publishers to bypass the cable companies and to stream their content directly to users. Video as a format was more engaging than text. But more importantly, it was a much better form of mobile advertising. While

the shift from print to digital meant brands could now measure exactly how many people were seeing or clicking into their ads, the mobile internet brought new challenges. Since the dawn of the worldwide web, online ads had been squeezed around or often in front of content in the form of banners and pop-ups. But the average smartphone screen was 75% smaller, or a quarter of the size of the average desktop monitor. With only a quarter of the screen real estate for mobile users, there was very little, if any, white space left to squeeze in banner ads and pop-ups like before. Thus, video became the superior medium for serving mobile ads as the advertisement would fill the entire

screen during playback and it couldn't be skipped, thereby guaranteeing brands full impressions. And since all ads are fundamentally charged by the number of impressions, every brand naturally wanted to make sure that they were paying for real eyeballs. Every publisher saw the same opportunity to create videos that filled this content gap between cable TV and the loweffort memes on YouTube. It was a gold rush, but there was real gold to be had here. For decades, the cable networks were like the video cartel. They had amassed massive fortunes being exclusive distributors. If publishers could reclaim just a fraction of that television ad spend for themselves, that would still be worth billions of dollars. This all played out in 2016,

just 2 years before Facebook would yank the rug from beneath the feet of the publishers. Zuckerberg publicly fan the flames, boasting that the world was entering a golden age of video. Based on all the big data they had at their fingertips, he predicted that in five years time, people would no longer be reading most of their content, but instead watching it. Text would be a thing of the past. Based on all the free traffic they were getting from Facebook, every publisher from BuzzFeed to the New York Times had no reason to doubt Zuckerberg. With his confirmation, they aggressively chased video, invested in production teams, laid off writers, and built in-house studios. But their misstep was more technical than

creative. What the legacy publications got wrong was that they all unanimously refused to embrace YouTube. They instead focused their efforts on hosting the videos themselves under the crazy belief that they could somehow beat Google at monetization, analytics, and distribution. They insisted on forcing consumers to watch their content on their own clunky video players where the laggy playback, buggy controls, poorly resolution, and bad streaming constrained viewership. It was this collective misstep in which Buzzfeed, Vice, and Vox, thrived, as they all published directly to YouTube. Google, like Facebook, was eager in the 2010s for quality content, but for slightly different reasons. It wanted YouTube to

shed its juvenile reputation of being a place for cat videos, video game montages, illegal Family Guy clips, and amateur home videos. The only way to do that was to have more professional content on the platform. There were a few individuals who were bringing that highquality production onto the platform like Casey Neistat, but that kind of talent was few and far between. Google was more than happy to distribute the content produced by these digital media startups, which had dramatically less risk of copyright infringement and significantly greater production value than an amateur skit. Every startup found its own niche. Vox focused on the intellectually curious, explorative,

knowledge-seeking segment. Vice oriented itself on the edgy, adult, mature, hard-hitting journalism, and Buzzfeed targeted the casual mainstream masses. In terms of viewership, volume, and reach, Buzzfeed was arguably the most successful of the three. Its content was the cheapest in terms of production, as the producers themselves served as hosts to keep the cost down. Topics were always brand safe, and the shows were fundamentally all the same in unscripted reaction content. Since video was no longer gatekept by the TV and film industry, there was now also a plethora of cheap talent who were eager to work at these startups. Shows no longer needed these expensive celebrities, blue chip actors, and top-of-the-line

videographers and directors to gain traction under the endless chase for virality. Every idea was a good one. But by the late 2010s, the landscape shifted once more. The legacy publishers realized just how much they had lost by forcing consumers to use their own video players and compelling advertisers to go through their sales channel. There was no better distributor, host, and monetizer for video outside of YouTube. And Google, relative to Facebook, was far more consistent in terms of supporting content creation and maintaining fair distribution. Even the professional sports leagues began posting their official game highlights on YouTube under the newfound understanding that some eyeballs were

better than none at all. Legacy publishers began shifting their content to YouTube, adapting their shows from the overproduced, highly choreographed, scripted TV format to the unstructured, unscripted, free form, and conversational style popularized by BuzzFeed. There was now more quality content than ever on YouTube. But while Vice and Vox maintained their edge in video over the years through their access and production quality, BuzzFeed could not do the same. Their styles and formats were easily replicated, not just by the legacy publications, but also by independent content creators. What made Buzzfeed videos unique were not their value or exclusivity of information since they offered little of both

outside of Tasty's recipes. At their core, their only differentiation was in the on-screen personalities. Their best videos thrived on the parasocial relationship between viewers and the Buzzfeed employees who served as reoccurring guests or hosts on shows. And in time, those employees who were just relatable ordinary people became internet celebrities. Buzzfeed had been a beneficiary in the mid2010s thanks to a seemingly infinite enough supply of these energetic, passionate people who are willing to work long hours and to make videos for cheap, especially when going viral came with the promise of personal fame. The same way that software companies all inevitably become feature factories. Buzzfeed became a

content factory. As the company lost greater amounts of money year after year, the video teams were under increasingly greater pressure to deliver both virality and volume. But the same producers who are now internet celebrities had built up followings of their own. And they all soon realized that they could make more money doing their own YouTube channels than they would ever make working at BuzzFeed. They had the confidence to believe that even if they left BuzzFeed, their fans would come with them. This was the root cause behind the wave of I left Buzzfeed videos in the late 2010s as the company struggled to retain the very talent it

had helped create. This only increased advertiser and viewer fragmentation as brands no longer needed to go through Buzzfeed to reach millennials. Instead, they could sponsor the former Buzzfeed creators who are now independent YouTubers for similar results at a lower cost. This meant that Buzzfeed videos ultimately had no mode at all as the appeal, virality, and power was all concentrated in the individual on-screen personalities and hosts rather than from the subject matter itself. The paradigm shifts that had propelled Buzzfeed to unicorn status had become the very forces that ultimately weakened it. With a drop in referral traffic, increased competition, and steadily commoditized

video content, the company moved to acquire Huffington Post and Complex with its remaining cash in an attempt to stabilize the business. It was similar to what Time Warner had done 20 years ago by combining multiple publications and brands under one roof. The idea was that they could strike a better deal with advertisers. It would no longer be up to BuzzFeed alone to carry eyeballs and to deliver traffic. The acquisitions also helped the company boost earnings so the topline would look more impressive to investors. But the business was in such a poor state that they opted to IPO via ESPAC to get to the market as quickly as possible. And the public got to see for the first time ever the fundamentals of the world's

biggest digital media startup. The idea that BuzzFeed could be profitable off advertising alone had turned out to be a fallacy. BuzzFeed was making a little over hund00 million a year in advertising alone across all its brands. It's a shockingly low figure for all the many hundreds of millions of views that the company has amassed over the years, as there are only a few publications and content creators that were as consistently viral as BuzzFeed. The $100 million in annual ad revenue, the supposed backbone of a trafficbased business model, has ironically never been enough in the 6 years since BuzzFeed's IPO to cover the cost of content creation alone. BuzzFeed called its second largest income stream content

revenue, which is really just a nice way of saying paid media and product placement. The majority in this revenue did not actually come from Buzzfeed or Tasty, but instead from Complex. Complex through history had branded itself as a reporter of trends in fashion, sneaker, food, music, sports, and culture. Ironically, they weren't actually doing any reporting. Complex business was actually all about getting paid by agencies and brands to create content that would hype up products and clients as infashion staples to the gullible public. The last income stream was commerce revenue, which is a nice way of saying affiliate marketing. Whenever someone bought an item featured in a

Buzzfeed, tasty, or complex video using the link in the description, the company would earn a commission for driving the sale. Buzzfeed proudly displayed these revenue streams as a way to show how many avenues the business had to make money. Yet, the reality is that since there's no upfront charge for access, monetization is still fundamentally limited to post delivery. That means if content delivery is to deacelerate in any way, there's no reoccurring revenue or upfront monetization to keep the lights on. The only option to maximizing revenue under this business model was to try and combine all three income streams into every single piece of content. In the ideal scenario, every Buzzfeed,

Tasty, Complex, and First We Feast video would have ads inside. They would have an embedded product or brand placement and then some big call to action for the viewer to buy something related to the video using an affiliate link. Despite maxing out on post delivery monetization, BuzzFeed was still losing millions of dollars every year. Even when people were stuck at home during a global pandemic, BuzzFeed still posted an operating loss in 2021, despite enjoying a near 40% boom in ad revenue that same year. Just 2 years after buying Complex for $300 million, the company ponded off in a fire sale in 2023 for a third of what it had paid, admitting that paid media and product placement was a bad business. Making

custom branded content and then finding ways to insert product placement in a creative way that would satisfy every single individual client and agency was time-conuming, troublesome, and inefficient. By dropping complex, Buzzfeed waved goodbye to $100 million in annual revenue. The new goal was to refocus on only the strongest brands in Buzzfeed, Huffington Post, Tasty, and Hot Ones to make the most in a weak ad market. Yet the surge of Tik Tok meant that advertisers were now taking more of their budget to yet another walled garden that publishers could not survive in. While Buzzfeed was able to slash sales, marketing, HR, and administration down to the bone, it was not able to do the same with its editorial and creative

teams. With the best talent constantly walking out the door and greater competition for eyeballs across platforms, the costs of content creation have only increased in subsequent years. People at these digital media startups, whether they were creative or technical talent, had all been willing to work long hours for below average wages for the chance to create content and to grow. The same was true at Vice, where accomplished videographers were paid just $300 for a full day of work. Both startups had benefited from underpaying their workers. Their leaders never imagined that the creator economy would grow to a point where individuals could

earn more doing the same work by themselves for themselves on the same exact platforms. To get ahead of both attrition and expenses, BuzzFeed has tried to outsource production by operating like a talent agency and creator accelerator. They have residency programs where emerging content creators are invited to produce content for BuzzFeed, and the company gets to distribute that content across its brands. The bet there is that the supply of aspiring freelance influencers who are looking for exposure will forever outweigh the number of in-house personalities that leave to start their own YouTube channel. By 2023, BuzzFeed had come up with a new mandate for its creative teams. They were to focus on

scalable, sustainable video production rather than one-offs of the past. And they should look to Hot Ones as the blueprint. Hot Ones is a long- form, highly repeatable show that has one set and many natural insertion points for product placement and affiliate marketing. It also has an IP that can be flexibly extended to branded consumer products. But despite BuzzFeed's best efforts to make Hot Ones the cornerstone of a bigger content universe, none of the spin-offs have enjoyed the same viewership and have all been seemingly canled after just two seasons. People are only interested in hot ones and very little else from First We Feast as a brand, leaving the company with a strange phenomenon of having a hit show

but a dud brand. Imagine knowing Game of Thrones but not HBO or Stranger Things but not Netflix. By 2024, Buzzfeed's founder had thrown in the towel on the traffic-based adentric business model. Despite selling off Hot Ones for $80 million, the company was still losing more money than ever, and the margins were just as bad as they were 5 years ago. With a stock now worth less than a McDonald's apple pie, the founder is now swinging for the fences. His latest strategy is to get BuzzFeed out of publishing entirely, and he plans to do that by launching a new experimental social media platform by the name of BuzzFeed Island. And while nothing has been revealed, this time he's making

sure to charge a subscription. When we look at the rest of the digital media landscape, the best is really Business Insider. Business Insider is owned by the German media conglomerate Axel Springer. Business Insider has interestingly taken different measures to combat against many of these paradigm shifts. For one, they appear to no longer allow staffers to be in videos. The only people that seem to get featured in front of the camera are the one-off subject matter experts, thereby throttling the issues of talent retention and parasocial relationships that plagued BuzzFeed. While it took BuzzFeed until 2024 to recognize that you just have to charge subscriptions to survive at scale as a publisher, Insider was able to recognize the realities 5

years earlier by launching their own subscriptions in 2017. But in the brief time that Axel Springer was public, they still reported overall declining profits and margins. And Business Insider before its own acquisition in 2015 had a net loss of 11 million. The Arena Group, which is the publisher behind Men's Journal and The Street, has also declared significant operating losses. The company was fast approaching bankruptcy in 2024 and even had to give up its license to publish Sports Illustrated. As of today, the company is on life support thanks to a cash infusion from the founder of 5Hour Energy. And then there's Ze Davis, the

corporation that owns PC Mag, IGN, Mashable, and CNET. They run these publications like private equity where every cost is trimmed down to the bone, profit is the only consideration, and writers are treated as easily replaceable commodities. But even with that approach, the operating margins for their digital media division have regressed year after year and remain just as volatile as the ad market that they depend on.