Buzzfeed Is Only The Beginning
BuzzFeed just raised $50 million
and is valued at $850 million. Andreessen Horowitz, on of the most respected VC firms made the investment and has predicted a changing media landscape that could grow 10x-100x in the next five years.
News has always been received in a quick, glancing kind of way. Newspapers were published daily or weekly, sold cheaply, and intended to be skimmed and dismissed. Now, these publications have moved to digital, but have not transformed with the new medium. It’s near impossible to read a newspaper article on a cell phone while boarding the subway or struggling for a seat on the bus.
More and more people spend their time watching television shows or playing games while in transport. Reading a digital magazine or newspaper article is too time consuming and too inconvenient to win the battle for attention. Daily televised news broadcasts are too dull and boring to compete with the addictive enjoyment of playing a game or watching a TV show.
In order to survive, news needs to transform into something more interesting. News itself is inherently more interesting than a fictional television show or game, the current problem is it is just not displayed as such. People should be naturally inclined to learn about what is happening in the world around them.
Another problem facing current news forms is the focus on the negative. Anything that drives customers to feel bad will not last long. On the other hand, anything that is too cheery (Upworthy) faces the problem of seeming like a scam or too fake. It is important to focus most on making interesting content, not content that serves any psychological or political purpose.
The news media is in a unique position to harness amazing profit growth over the next decade. With maturing social sharing sites like Facebook, Twitter, and Youtube as well as more up and coming sites like Pinterest, Instagram, and Snapchat, the industry now has a solid and growing foundation on which to build. Just as newspapers required mature printing and distribution capabilities and television news required mature television distributors and a mature television market, the new age media is beginning a period of rapid growth.
Furthermore, with the advent of crypto currency like Bitcoin, profitability is becoming less and less of an issue. With Bitcoin, users can pay fractions of a dollar or even cents per webpage view. Surely a $5/month or $60/year price tag is frightening for users, and the SaaS format makes media companies’ revenue predictions very difficult. However, it is doubtful that the same user would opt to not pay 5 cents to read an article documenting the growth of the US police state through an interactive graph and animated video following the issues in Ferguson, Missouri.
Financially speaking, this ability to charge per page view will create a basic expectation for article revenues and allow a more stable pricing structure to emerge. Investments and loans will be easier to obtain when future income can be predicted more easily. Hiring of editors and contributors will be easier as well.
Secondly, just as magazines and newspapers sported amazing, high quality advertisements in their heyday, I believe we can propel the online advertising market forward into a second advertising golden age by only accepting the most high quality advertisements from the best brands. I see a future where pay per click is disregarded by finer luxury brands and advertisements can once again be judged by their beauty and sophistication rather than their trickery and ability to garner clicks. Indeed, having a distinguished reading audience view a well-created digital ad, whether it is clicked or not, will undoubtedly improve the company’s image.
Lastly, I see a change in how contributors and editors will function. As news media moves from purely written or filmed accounts and into a more interactive and engaging format that can be accessed through mobile devices (namely smart phones, google glass, etc.), I see contributors creating content more and more by means of coding. No longer will journalists be able to only rely upon specialized knowledge and a solid grasp of language. They will now need all of these skills, but also the ability to code and truly “develop” a story. Editors will need to be supreme coders and most likely have a solid sense of marketing technique as well in order to help stories to reach their highest potential of being shared.
We need not fear a future where news media is dead and news media is overtaken by Twitter feeds and random bloggers. Surely these will still linger, and many will offer high levels of utility. However, I see our current stage of news media as a temporary fix for a disrupted industry that has yet to formulate an answer. Just as Marc Andreessen said, look for this to change over the next five years and for phenomenal growth in the industry.
Other relevant articles:
Chris Dixon + Jonah Peretti on BuzzFeed’s Success http://cdixon.org/2012/07/24/buzzfeeds-strategy/
The Argument for BuzzFeed Disrupting the News Media Industry http://valleywag.gawker.com/here-s-what-buzzfeed-s-new-investors-really-think-about-1619389022
Follow me on Twitter: @c_h_wood
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