To write about journalism and the media industry is, all too often, to write about decline – and the past week has proved little different, as HuffPost announced first significant job cuts in its US newsroom, then the shuttering of its Canada site, and then huge cuts at its UK operation, including the loss of its entire news team, with editor-in-chief Jess Brammar among those at risk.
The decision comes only months after HuffPost was “bought” by the rival new media start-up BuzzFeed, in a strange transaction that saw HuffPost’s previous owner Verizon hand money to BuzzFeed in exchange for a stake in the new, larger company. (Disclosure: I worked for BuzzFeed UK between 2015 and 2017, and have written for HuffPost on a freelance basis. I have no shareholding in BuzzFeed.)
If a shop offered to “sell” you a laptop and to give you money, rather than the other way around, you’d probably be quite dubious of the transaction. So too it was with the BuzzFeed buyout of HuffPost – BuzzFeed had itself done multiple rounds of layoffs, eliminating its UK news operation, while HuffPost was loss-making.
The transaction now resembles a last-chance bet – the sale price being funding to cover operating losses and redundancy payouts. A few years ago, the theory was that while some “legacy” print outlets might suffer, there might be a bright future in digital media. That future now seems to be fading – but the news might not be quite as dire as it first appears.
Yes, both BuzzFeed and HuffPost faced major commercial hurdles that proved all but insurmountable – yet in neither case were these actually the fault of anyone near the editorial floor.
HuffPost suffered because it lost its status as an independent company a long time ago. In 2011, it was bought by an ailing AOL in a bid to focus on quality original content for its large audience. In 2015, AOL itself was bought by Verizon, which left HuffPost as a subsidiary of a subsidiary in a vast corporation, with none of the champions of the original deal left in the company’s top management.
BuzzFeed had mirror-image problems: it had been backed as a sexy, fast-growing start-up by venture capitalists – the people who provide the funding for tech start-ups such as Airbnb, Uber and Facebook. These backers want high risk and high return: they want to get ten times (or a hundred times) back what they put in, within seven years or so, or else they expect nothing. They are the business representation of “go big or go home”.
Media, though, doesn’t scale like tech: one journalist will always be able to produce only so many high-quality features a week, or videos a day. The huge returns on scale that big tech can provide don’t extend to media – and BuzzFeed’s investors missed their window to sell the company for a profit, leaving it suddenly desperate to break even and so frantically cutting costs by axing staff who had done nothing other than deliver what they were asked to deliver.
The hope for the merged BuzzFeed/HuffPost is that after the cuts they can use their bigger scale to sign better deals and break even, then turn a profit. That could prove a tough ask: neither is the new kid on the block any more, both have shed many talented staff (through voluntary exits as well as layoffs) and goodwill from journalists towards their top execs is, justifiably, thin on the ground.
When outlets shed staff and make losses, it’s easy to assume their editorial teams were doing something wrong – but the frustration with both is that they were hitting their stride just as they were cut. HuffPost is rarely discussed in media circles, but it boasts a huge global audience (that skews female), with 40 million monthly US visitors in September 2020, and has won several leading American journalistic awards.
Its UK newsroom built a reputation for character-led stories on social issues and for stories that spoke to “hard-to-reach” (often BAME) audiences – often hard to reach for other outlets simply because they had never tried. HuffPost had experimented with temporarily moving its newsroom to Birmingham and hired diverse correspondents, and was duly shortlisted for some of UK journalism’s top awards.
BuzzFeed UK, whose news operation was shuttered even earlier, had gone in less than five years from a name said with a snigger to being named news website of the year at the Society of Editors awards, with a strong reputation for scoops and for cut through with a younger audience – with a diverse newsroom and (at one point) the most senior black female editor on a UK national. During one round of cuts, the UK operation was even rumoured to be breaking even, but was nonetheless cut alongside the company’s other international newsrooms.
There is always a temptation when jobs are being lost to suggest that newsrooms are lions led by donkeys – but it is clear both BuzzFeed and HuffPost’s news operations were creating real value through genuinely distinctive journalism. That should be possible to turn into a real, profitable business.
BuzzFeed was encouraged to grow too far and too fast by venture capitalists wanting a quick return on their buck – who then cut back just as rapidly when it became clear those astronomical returns wouldn’t arrive. HuffPost suffered from corporate neglect, representing less than 1 per cent of its parent company’s turnover, and was thus left to languish.
There are multiple revenue streams starting to work online: display adverts make some money, even if everyone hates them. Subscription or sponsorship helps, as does bespoke advertising and native content (brand-sponsored posts and similar). Start-ups such as Substack have shown there’s even money in email newsletters – and media companies could seek to drive revenue through partnerships with individual journalists (perhaps on a revenue share).
Journalists have proven they can create online newsrooms that generate social value and can reach huge audiences. Other outlets have proven there are multiple ways to raise money off that. And the talent is there. What’s missing is the right owner: someone who wants to make decent, but not venture capital-scale profits and who can be more responsive than distant US corporate overlords.
The latest news for digital media might be grim. But that shouldn’t stop people trying.
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