A Media Company CEO’s Vision
BuzzFeed’s strategic path reflects where traditional media ought to go.
Last week, BuzzFeed founder and CEO Jonah Peretti published a long memo on LinkedIn. It was titled a memo to the staff, but really was only partly directed to the staff. It was also a message to all external stakeholders and to competitors.
At any rate, it was brilliant. It was the most clear-headed, fully thought-out description of where media is going, and what attributes are necessary for success in a completely transformed media era, that I’ve seen. For those reasons—and because it serves as a great example of executive communication—it’s worth discussing.
First thing Peretti did was thank his team in what seemed heartfelt and was certainly gracious:
“Before anything I want to thank you for all your amazingly great work over the last year. All of our success is because of you. BuzzFeed is on a significant roll, we have reached new milestones and our future looks tremendously bright.”
And that’s just the start. Peretti cited statistics illuminating BuzzFeed’s staggering Web growth. He outlined non-Web initiatives, such as an app, a YouTube channel and live meetups. He indicated the things BuzzFeed will not be doing: Live paid events, print magazines, white-label versions of BuzzFeed. And he reveals that his company is profitable—a rarity for Web-only startups.
As part of his thank-yous, he cites the work of various content, technology, data and marketing teams. Then Peretti gets into some interesting territory.
“Most other publishers integrate off-the-shelf products built by others, but this full-stack, vertically integrated approach was worth the significant, multi-year investment and is paying off fantastically today,” Peretti said. “There are great tech companies and great editorial institutions, but it is very rare for one company to take both as seriously as we do.”
This is a really important point. Very few traditional media companies look at their businesses this way. And that serves to ensure that they are perennially a half-lap or more behind technology companies like Google and Facebook, which understand the direct relationship between content and technology, and how it drives the new types of media consumption. It’s simply not about monthly magazines, with a front-to-back pattern, and traditional devices like the TOC, the front of book and the features anymore.
This leads to the really interesting core of the memo, where Peretti pivots into a discussion of the characteristics and economic prospects of BuzzFeed compared to traditional media companies.
“Despite the struggles of the traditional media, there remains an insatiable desire for great reporting, entertaining content, and powerful storytelling,” Peretti said.
“Facebook, Twitter, and the other Silicon Valley-based social sites are amazing distribution platforms, but user generated content alone isn’t enough to fill the hole left by the ongoing decline of print newspapers and magazines. The world needs sustainable, profitable, vibrant content companies staffed by dedicated professionals; especially content for people that grew up on the web, whose entertainment and news interests are largely neglected by television and newspapers.”
This is all true. It’s important to hear, even if his point about the “Silicon Valley-based social sites” ought to be looked at with skepticism, because the basic dynamic of social sharing undermines the profit-generating ability of news organizations—and because BuzzFeed’s founding idea is about creating (and also finding and sharing) content for those same “Silicon Valley social sites.” You can’t have it both ways.
Still, Peretti is pointing to a new future, and he elaborates in nine additional points, covering everything from news to mobile, international coverage and more. (The point about being an international brand is especially valuable. Old-school media companies launch international editions. Technology companies, and, Peretti says, BuzzFeed, are one brand, one content package, translated and presented to different markets.)
One of Peretti’s points is that his company is investing in news. “There is a huge opportunity to be the leading news source for the social, mobile world,” he writes. “As we saw during the 2012 election, the Boston bombings, and our LGBT focused coverage of the Sochi Olympics, a new generation of readers are turning to us for news.”
You didn’t need to search very hard last week to find a contrary perspective, one that Peretti never addresses. Jeff Bezos, the Amazon CEO who just bought the Washington Post for $250 million, gave his first interview—to the Post. Bezos:
“The Post is famous for its investigative journalism,” he said. “It pours energy and investment and sweat and dollars into uncovering important stories. And then a bunch of Web sites summarize that [work] in about four minutes and readers can access that news for free. One question is, how do you make a living in that kind of environment? If you can’t, it’s difficult to put the right resources behind it.”
Bingo. If BuzzFeed is truly going to succeed in homegrown news, it needs to crack that code. Nothing that I’ve seen indicates anyone—including anyone at BuzzFeed—has figured that out.
And then there’s advertising. “Part of being a great business is being a “must buy” for advertisers who have many options,” Peretti said. “This means giving advertisers the full advantage of our scale, our data, our creative team, our social and mobile reach, and our technology platform. We have more expertise about social content than any other company. We can light up the social web for an advertiser across Facebook, Twitter, and YouTube, with content that is worth clicking and sharing.”
The challenge with that is that BuzzFeed’s own advertising model is based on a trend that works against media companies. BuzzFeed specializes in native advertising—advertising that looks and feels like and lives in the same format and in the same context as BuzzFeed’s (and other media companies’) own content. That is innovative, for sure, but it plays into another major trend—companies creating their own content and building audiences on their own, without the traditional absolute reliance on media companies. This, combined with the targeting capabilities social sites and Google, enables non-media brands to create content, engage audiences, identify leads and sell products and services without the same level of reliance on third party companies.
I love the clarity of Peretti’s vision. That doesn’t mean there aren’t significant trends playing against BuzzFeed.