World-renowned publications, as well as newer ones, are struggling to raise their business game to keep up.
The debate surrounding the future of the digital media industry continues apace after online giant Buzzfeed announced significant job cuts and the restructuring of its business team as it struggles to compete in an increasingly tough market.
Buzzfeed, which draws a young, educated demographic with content on everything from politics to DIY, was long seen as one of the brightest stars in the online media firmament, yet the company will shed 8 percent of its US employees this year with further cuts expected to its UK operation.
Yet it is not the only outlet in trouble in 2017 in an industry that is facing unprecedented challenges.
Ever since media organizations began offering free content online, generating revenue only through ad clicks, industry observers have been questioning the sustainability of the business model. Indeed, many digital-only outlets, such as Vice and Buzzfeed, which overwhelmingly target millennials, have increasingly shifted to video content as their primary income earner.
Others, such as The New York Times and Wall Street Journal, have turned to subscription models with positive, if mixed, results. At Thanksgiving, The New York Times published an open letter to its readers explaining that while its digital advertising revenue had increased by $23 million this year, its print revenues had declined by $43 million, or 16 percent compared to 2016.
As such, the advertising industry is also in disarray. Last week, the Pivotal Research Group cut its growth prediction for US ad spending to 4.1 percent for this year. In 2016, 90 percent of growth in digital advertising came from just two companies: Google and Facebook, which together are projected to account for 61 percent of the market this year.
“We have a problem. I know it; you know it; we all know it,” NBCUniversal’s ad sales chief Linda Yaccarino told the audience at a conference of media and advertising industry figures in late November.
Optimists claim that the media has always had to evolve in the face of new technology whether it be the printing press, radio, or television – and has always survived – yet it’s clear that many outlets may fall by the wayside in the meantime.
The key to the future will be the ability of outlets to generate revenue outside of advertising. Despite taking hits to its ad revenues this year, The New York Times claims that its digital-only subscriptions rose by 44 percent, to $75 million, during the same period while The Washington Post saw a 75 percent gain in digital subscribers last year.
These are world-renowned publications with long-established readerships. Newer publications, and digital-only outlets that eagerly leaped upon the millennial demographic over the past decade, may have to raise their game to keep up.