Who is being shallow? How you should be thinking about Buzzfeed

The discussions around the latest financing round for Buzzfeed revealed, once again, that the company is still being misjudged. Here is why they’re the future of publishing.

In his latest column, David Carr writes about the uncertain future of spun-out print newspapers. At the same time, Andressen Horrowitz announces that they have invested 50 Million into Buzzfeed through a post that Chris Dixon, a partner in the firm, published on his private blog. They value the new-media firm at 850 Million dollars. If you have read any news about this, you’ve probably encountered the comparison to the price that Jeff Bezos paid for The Washington Post and how Buzzfeed’s value exceeds it by 600 Million.

The media landscape has been unraveling since the early 90s. No news here. News is, though, that so few journalist are able to report the fact that after all those years there is now a new breed of media companies that provide a plausible alternative to how media and news publishing companies have operated so far.

Technology is the backbone

For a venture capitalist, there is nominally little difference between Buzzfeed and Facebook or Twitter. They are investing into the technology capabilities of those companies, not into their editorial staff.

BuzzFeed has technology at its core. Its 100+ person tech team has created world-class systems for analytics, advertising, and content management. Engineers are 1st class citizens

There is a clear distinction here between Buzzfeed (or a Vox Media) and its predecessors. While traditional news organizations only involve themselves as much with technology as they feel necessary to accomplish their main objective (journalism), new media companies like Buzzfeed build technology that provides an abundance in scaling opportunities. That in turn makes them both profitable and susceptible to the interest of VCs and allows them, for now, to maintain an editorial stuff of 200, invest significant resources into investigative journalism and long-form reporting.

But there is more

As a media outlet, Buzzfeed is competing for the same advertising dollars as other media outlets, but they aren’t doing so with the same products. In his talk at the Guardian Media Summit a year ago, Jonah Peretti, Buzzfeed’s CEO, said that he considers display ads to be a historic mistake that soon will be corrected. While so many of us certainly can relate to the statement, I’m sure someone at Google and Yahoo will refer to how much money this “mistake” is making them. Fact is, Buzzfeed would never attempt to compromise the experience for the user by adding ads to its site. In fact, you don’t see any display advertising on the website whatsoever. Instead of charging advertisers money for displaying ads that nobody wants to see, Buzzfeed is charging advertisers for helping them to create content that both solve the communication need of the advertiser as well as ensuring that it creates value for the recipient. For Buzzfeed this means a better user experience and the luxury not to compete in a plummeting display ad market. Advertisers get a significantly better engagement on their marketing message. This way, Buzzfeed is both a media outlet as well as the advertising agency.

To round this up:

  • Buzzfeed created a technology that allows them to build the product that users want
  • Buzzfeed offers advertisers native advertising products by allowing them to use the same tech that their editorial stuff is using to create stories thus making the advertiser happy and themselves very profitable
  • This in turn allows them to produce the kind of content that is being asked for right now

buzzfeed explained

After years in which we have seen the validity of traditional media-business models erode, companies like Buzzfeed and Vox Media at least provide a viable alternative. One doesn’t have to agree fully with any of those approaches. Looking closely, one can find sufficient reason to be doubtful about the path those new companies are taking.

The core learning, on which so many in the traditional media landscape are focusing when debating Buzzfeed, is certainly not that one has to adopt listicals with funny cat photos or a subversively viral approach to formulating headlines. Those cursory observations are preventing an old industry from learning exactly what it needs to learn from those newcomers.

This is an exciting time to be involved in publishing, journalism and media. Here at Third Wave, we strongly disagree with the notion there is a lack of good content. In fact, the opposite is the case. The difference is that great content is out there, it’s just hard to find and even harder to finance. That too is not due to lack of financial resources. In the Netherlands, De Correspondent have raised 1.7 Million in a crowdfunding campaign to launch a new media entity, in Germany a less exciting project managed to raise over a Million. There are also smaller success stories such as Deca. Those projects prove that there is both money and willingness to pay for good content. Crowdfunding it itself isn’t a business model, nor should it ever be considered one. It might work for certain projects, but it won’t be enough to provide a scalable business model that will ensure the continued existence of the fourth estate.

There is a wonderful, long interview – published on Medium, of course – between Felix Salmon and Jonah Peretti (CEO of Buzzfeed). It’s personal. It provides context to understand why Peretti is able, so far, to navigate first The Huffington Post and now Buzzfeed to being such huge success in the media world.

Be of the net, not just on it.

–Emily Bell, Director of Tow Centre for Digital Journalism at Columbia J School

Buzzfeed certainly is.

TW Commentary – Journalism thwarted by technology

Looking at the Deca cooperative as an example of how journalism must learn to understand the technology layer that influences every aspect of its future endeavors.

Deca

A promising long-form-journalism project

Deca is a new cooperative of journalists from all over the world. Specializing in long-form/magazine writing, they’ve won numerous awards individually. Inspired by the Magnum photo-agency from the 50s they now want to see what they can achieve as a group, but independent from bigger publishers. When Igor and I stumbled upon their Kickstarter campaign, we instantly “backed” them. They hit all the right buttons for us:

  • A diverse group of women and men from different backgrounds with lots of experience. A group big enough to bundle resources, but small enough to stay flexible and not getting to dependent on large donations to sustain the business.
  • A defined product and process with a completed first story that showed what kind of topics and quality to expect.
  • A humble goal for the campaign that made clear that they indeed want a little kickstart, not a blanco check.
  • A solid understanding that independent journalism endeavors include contain a great deal of community involvement and thus management, as their Kickstarter rewards show.
  • This Forbes article shows how they are even starting to do something that looks like on-the-job training for future journalists.

But most of all, we loved their positive attitude. Instead of laments to the decline of good writing, they emphasized the opportunities of change. They don’t want to “save journalism”, but “travel the world over to find the stories that matter, then telling them.”

The Kickstarter campaign worked well. They hit their goal of $20,000 within three and a half days and made more than $32,000 in the end. Soon after, they released their second story. All in all, a fine example how to start a journalistic endeavor in 2014. But now it seems like they’ve fall into the same trap as so many similar projects by underestimating one aspect: the technological side.

Thwarted by a technical problem

The platform they are using for their iOS app and the web app seems to have big problems with the sign up of all their backers. And it also seems that there’s no easy fix. The developers of the platform are working hard to find the bug. I can only imagine how frustrating this must be, especially because they can do nothing but wait until someone else has found the solution. And in the meantime, they have to do customer service (which they do well) instead of finding stories.

We are seeing this again and again: promising new approaches to journalism that get caught up in technical difficulties. Journalists obviously focus on the journalistic part of their work. If they are progressive, they also have a good understanding of the business side of things.
But now, there’s this layer that influences every aspect of a journalism company: the technology. From researching stories to the editorial process (writing, editing, fact-checking, versions management) to delivery via content-management systems and printing infrastructure to digital payment in apps and for subscriptions to communication with colleagues and readers etc. The need for these technologies is not new. But the options and with them the opportunities have exploded. The easiest solution is to outsource most of these aspects to external vendors. But Deca just learned how frustrating this can be.

Every journalism company will also be a tech company

The next step is not to try to bring all the technological aspects of a journalism endeavor in house. That would be a 20th century solution to a networked 21st century world. The way forward for journalism is to acknowledge and even embrace the role of technology in its business and get smart about it. The better journalists understand how the technology they need to deal with works and how they can use it to their advantage the better they can brief vendors, estimate costs and develop ideas how to get closer to their stories and their readers.

I understand that journalists want to focus on what they perceive to be the crux of their work, researching, investigating, reporting. But I have this hunch that journalists who get more interested in the technological aspects of their work will be more successful in the coming years.1

The current sign-up problems of the Deca app will be fixed soon, I’m sure, and the Deca team will continue to deliver great stories. But I’m also sure that this episode will have shown them to never again underestimate the influence of technology on their work and the connection with their readers. I’m keen to see how they are going to use this knowledge to their advantage.

Check out Deca at decastories.com.


  1. My hidden agenda for journalists interested in technology: I want better analysis of the influence of technology and the people in power behind it on our world. 

TW Reads – A Future of News edition

Five articles about the Future of News and why it needs a merging of journalism and technology.

“To be successful, digital publications must do more than permit a story to come together — they must also empower the kind of prolific, creative collaboration required to bring off stories that can seduce even the most distracted readers.”

Editorially

As Igor mentioned in his work note, we quite enjoy observing the news media industry at the moment. When the NY Times Innovation Report was released, we – once again – noticed the undercurrent of a theme we’ve been running with for some time now: in the future every company will also be a tech company. Or in this case: every journalism company will also be a tech company.

The merging of literature and technology is also true for journalism and technology. And it’s not only about how to get your content to your audience but also about infrastructure is changing consumption and thus creation.

We see the strongest potential for future success with approaches that show a joint passion for reporting, production, delivery and communication.

Here are some articles and links from the last few weeks on that topic:

  • The Atlantic: Method Journalism
    
Alexis Madrigal analyzes how this round of new media sites like Vox, FiveThirtyEight and others are no longer about an “area of coverage” but a “method of coverage.”
  • NY Times: Scoop – A Glimpse Into the NYTimes CMS
    In times when some in Germany think that 10 percent of a new media endeavor’s budget for tech is too much, this is an interesting look at the new, digital-first CMS that the NY Times is building. It’s a little more than just setting up a WordPress instance.
  • Editorially joins Vox Media
    
Besides being glad that the smart people behind failed startup Editorially having found a new home, this announcement is actually full of interesting insights. The Editorially team will help Vox Media to optimize the editorial workflow (see the quote above).
  • Forbes: The Invention Of News: How The World Came To Know About Itself
    In the heated debates about the future of news, we tend to forget about the history of news and what we can learn from that. Andrew Pettegree has written the go-to book about it and this interview makes us want to buy it.
  • BuzzFeed’s Jonah Peretti Goes Long
    
When even people like Seth Godin think that BuzzFeed is about cats and listicles, we’d recommend looking a bit deeper. And this (very) long interview with its founder Jonah Peretti is an excellent place to start. Trust us on this one.

What we read this week (28 Sept)

This week we read about the new things we are not seeing, how to beat a community of hackers, the potential last resort for journalism and Etsy’s new policy adjustments.

Quote of the week

As soon as you declare something a movement, everyone either wants to be a part of it or wants to destroy it.

James Bridle

Articles of the week

  • aeon: The machine gaze
    Will Wiles, having interviewed James Bridle on the New Aesthetic, draws some interesting conclusions about what it’s all about – “the new things we are not seeing,” because just as we are noticing these artifacts, they are becoming ordinary and unquestioned.
  • superflux: Design for the New Normal
    Anab Jain asks how you operate as a design company when your competitor is an open source community of hackers – selling 3d printed objects from virtual environments like Minecraft for a profit. In this presentation, she shows how superflux is approaching this challenge.
  • The Guardian: A £2-a-month levy on broadband could save our newspapers
    The Guardian’s David Leigh proposes a £2 levy – a tax, if you will – to save journalism. The tax could be collected through ISPs and regulated by an agency. That’s certainly a fresh edition to the discussion and we’re happy to promote it a bit while not necessarily agreeing with the proposal.
  • The Atlantic: A Conversation With Randall Munroe, the Creator of XKCD
    Megan Garber interviews Randall Munroe about the stories behind XKCD and its spinoff What If, as well as general ideas about work and staying creative and interesting. Some useful information in there for anyone who regularly creates content.
  • Wired: Can Etsy Go Pro Without Losing Its Soul?
    Good product sells itself. But what to do if our hands are tied by strict polies and orders keep coming in in large numbers? Being confronted with that, Etsy implemented a set of changes which hopefully will allow it to find a solution for those sought-after users who would like to expand their businesses.