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March 8, 2019, 1:12 p.m.
Business Models

BuzzFeed’s Jonah Peretti: Yes to scale, yes to platforms — still

“I know it’s popular to quit social media or say the internet is terrible, but we can’t give up.”

BuzzFeed CEO Jonah Peretti released a strategy memo Friday (timed to line up with his panel at SXSW) that outlined what he sees ahead for BuzzFeed in the coming year. The company was scarred by big layoffs in January, and many have begun to question the long-term sustainability of a business model so reliant on outside platforms (Facebook) for distribution. But Peretti says he sees “a clear path to a bright future for BuzzFeed. I’m hopeful the same is true for many of our peers.”

A few noteworthy parts of the memo:

BuzzFeed is making much more money from platforms than it used to, and it’s embracing them.

A year ago, in Q1 of 2018 we made about $500K in video platform revenue from Facebook; in Q4 of 2018 we made $3M. In January of 2017, we monetized less than 30% of views on YouTube; by November, we monetized more than 70%. Overall, revenue we generate from the biggest platforms — Facebook, Google, Amazon, and Netflix — has grown by 12 times since 2014.

These stats are in a section of the memo titled “Fix the platforms and get paid to do it.” Peretti argues that publishers are “fixing” the platforms by “[filling] the void…with quality content,” with the “void” referring to “opportunistic bad actors — anti-vaxxers, flat-earthers, conspiracy theorists, misogynists, racists, xenophobes, trolls, partisan extremists, scammers, and pedophiles.” (Related: Michael Golebiewski and danah boyd’s idea of “data voids.”) The argument is that by putting their own content on the platforms — and monetizing it — publishers will push the bad stuff out, and Peretti’s view of publisher relationships with the platforms is a rosy one:

Digital media companies scaling down or turning away from the platforms is the exact opposite of what the platforms need. It is much harder to moderate bad content than it is to create good content. No matter how much money the platforms spend, or how many content moderators they hire, this problem won’t be solved by removing bad content, we need an ecosystem where creating good content is sustainable. If tech and media work together, everyone will benefit.

This changes, of course, if the platforms turn away from you. It’s not clear what happens to content from publishers like BuzzFeed if, say, Facebook actually shifts its focus to private conversations between individuals.

Platforms are a piece but not the whole.

Peretti writes that “we still aren’t making enough from the platforms to sustain our investment in content,” and says that “in 2018 and 2019, we will generate over $200m in revenue from business lines that didn’t even exist in 2017.” He points to Tasty, which is “the biggest media brand on Facebook, but almost all of its revenue comes from businesses we’ve needed to create on our own.”

No “cheap TV.”

“We don’t make shitty TV, we make good internet,” Peretti writes. “We lean into the unique, digital power of that two-way connection, we create new ways for our audience to experience BuzzFeed.” Video content built for Netflix or Facebook Watch is “complementary,” he says, but “some digital media companies have pivoted to cheap TV or think of television as a more important medium. That isn’t true when you look at what drives culture today and in the future.” (Netflix said no to a second season of BuzzFeed’s series Follow This in January.)

The full memo — which includes the prediction that in a few years, the internet dumpster fire-ness of 2016-2019 will be a distant memory; fingers crossed — is here. And if you don’t want to read it, you can get the gist by reading tweets from his SXSW talk, just concluded. Kerry Flynn tweeted the whole thing if you want a straight narrative; a selection is below.

POSTED     March 8, 2019, 1:12 p.m.
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