Buzzfeed founder and chief executive Jonah Peretti has said the “foundation” for a strong digital media requires “getting paid better by the platforms and hustling to build businesses on our own”.
In a memo to staff, which Buzzfeed published on Friday night, Peretti acknowledged that the past year had been a “challenging one for publishers” and that Buzzfeed had made “painful decisions” to cut staff.
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“The coming year won’t be a cake walk, but I see a clear path to a bright future for BuzzFeed,” he wrote. “I’m hopeful the same is true for many of our peers.”
Peretti announced in January that the digital-only news website was cutting 15 per cent of its staff globally in a restructure designed to reduce costs and “improve our operating model so we can thrive and control our own destiny”.
Buzzfeed UK’s editorial team was cut from 37 to approximately 23 as a result of the changes.
Stuart Millar remains head of news heading up a politics team of five, two editors, an investigations team of six, three celebrity reporters, two social news reporters and two social justice reporters, with one person on curation and two in support roles, Press Gazette understands.
In his message he said it is crucial that digital publishers are better paid by tech platforms like Facebook and Youtube for their content and that “real progress” in this area has begun.
Buzzfeed made $500,000 in video revenue from Facebook in the first quarter of 2018, which rose to $3m by the end of the year, Peretti said.
Overall, the publisher’s revenue from Facebook, Google, Amazon and Netflix (for show Follow This) had grown by 12 times since 2014, he said.
But, despite this growth, Peretti said Buzzfeed is still not “making enough from the platforms to sustain our investment in content”.
He added: “The big tech platforms are important but having websites and apps is a big source of our strength and making them the best place to experience Buzzfeed is a strategic imperative for us.”
The publisher has been forced to diversify into new businesses and products relating to brand safe videos, affiliate links (linking to retailers relevant to stories) and influencers, which Peretti said will lead to more than $200m in revenue in 2018 and 2019 from business lines that did not exist in 2017.
Peretti went on to say that the “future of media is about real world experiences and transactions”, saying that Buzzfeed’s food platform Tasty had inspired more than two-thirds of its audience to make a recipe.
“We are 100 per cent committed to digital media and believe in its future,” he said.
“The economics of the platforms are improving and we are finding new ways to make money beyond them as well. This is the foundation for a strong model for digital media — getting paid better by the platforms and hustling to build businesses on our own.
“At a moment when many are sceptical about digital media, when some companies are pivoting away from the internet, we are focused on embracing the internet even more. This is what the platforms need right now, what the world needs, and what is best for Buzzfeed.”
Buzzfeed UK made a pre-tax loss of £1.9m on turnover of £33.4m in 2017, financial figures filed with Companies House in December show. The website, a subsidiary of US company Buzzfeed Inc, recorded a total loss of £2.3m for 2017. The figures are an improvement on 2016, when the company made a total pre-tax loss of £3.3m on revenues of £20.5m.
Picture: Reuters/Lucy Nicholson