Today is a day that ends in Y, so it must be a hard day to be in digital media. In the last few hours, we saw four jarring reminders that the business model most media companies are currently relying on isn’t cutting it.
Here’s a rundown of what happened:
- As I wrote about earlier today, Oath is cutting over 500 positions as it strains to fit underneath its new Verizon overlord. Layoffs happen during acquisitions, of course, but this example adds to the thousands of layoffs previously announced earlier this year.
- Ziff Davis, which owns media brands like PC Magazine, is reportedly buying Mashable for $50 million, according to the Wall Street Journal. This may seem like a good thing, since Mashable was able to sell itself and stay afloat. Yet early last year, the digital news site raised a round of capital at a $250 million valuation. This Ziff Davis acquisition slashes the company’s worth by about 80%.
- BuzzFeed, the media company everyone else looks toward to as a beacon of hope, is likely going to significantly miss its revenue targets this year, reports the Wall Street Journal. This is especially jarring since BuzzFeed has taken great pains to diversify its revenue flow–investing in many different areas, including consumer goods and television. As the company prepares to IPO, it has provided a blueprint for other media companies to find more sustainable revenue models. But the company is reportedly missing its targeted 2017 revenue of $350 million by anywhere between 15% and 20%. So perhaps these other forays aren’t going as well as the company hoped.
- Vice too is expected to miss its revenue targets. According to the Wall Street Journal, it estimated it would exceed $800 million in 2017, but likely won’t.
It’s a sad fact that the digital media business is tough. Companies are either pivoting to video, shuttering, or selling themselves. Today is another reminder that the years ahead will be an uphill battle for independent media companies. Let’s hope something changes.CGW