What the 2,000 job cuts tell us: the free market kills digital journalism | Media



IIn December 2016, Jonah Peretti, the charismatic founder of the entertainment and digital news company BuzzFeed, wrote his annual memo to his staff of 1,400 people. The memo described some of Peretti's frustrations after the presidential election that year in the United States revealed the amount of poor quality and deceptive content circulating online. His own news site had revealed some of the most important stories in the "fake news" scandal surrounding Facebook. But Peretti's remedy was not the regulation or punishment of Facebook, but the concern that the old guard of so-called "inherited media" was also to blame.

"Media companies have been too slow to move to digital," he wrote. "They have stuck to print and broadcast, even when it was clear that audiences are moving elsewhere." This means that budgets for quality journalism focus on the wrong places, creating a void that is filled with the cheapest content. possible, often from questionable sources. "

In the city of New York, in January 2019, it is brutally cold. Winter has come with wild consequences for digital publishers, including BuzzFeed. In the space of two weeks, about 2,100 jobs were lost in all media, and many disappeared from purely digital publishers. The layoffs of BuzzFeed accounted for 15% of its total staff, a loss of about 220 jobs in all departments, including in its New York newsroom, which is much admired. On Friday, Vice, another media company that was once badociated with rapid growth, said it would lay off 10% of its workforce, while last month, the Verizon phone company, which owns Huffington Post and Yahoo, eliminated 800 employees in its media division. In the United Kingdom, the Pool, a website aimed at women launched in 2015 by radio host Lauren Laverne and magazine editor Sam Baker, went into liquidation, with 24 journalists facing dismissal.

Many of these layoffs were carried out in real time on Twitter, as journalists reported on the clumsy and, often, unjustly cruel ways in which they were let go. Vice reporters knew about the layoffs and sometimes had their email accounts closed before the company told them they were among the victims.





Ariann Huffington, founder of Huffington Post, whose parent company Verizon announced last month 800 job cuts in its media division.



Ariann Huffington, founder of Huffington Post, whose parent company Verizon announced last month 800 job cuts in its media division. Photography: Paul Morigi / Getty Images for Fortune

The loss of jobs in the media is not unusual. In newspapers, particularly in the local and regional press in the United States, the last decade has been catastrophic. Between 2008 and 2017, the number of jobs in newsrooms in US newspapers. UU It was reduced by 45%, to 39,000, and all jobs in the newsrooms of the US. UU., Including television and radio, decreased by 23% in general. Among the layoffs so far in 2019, newspaper companies McClatchy and Gannett have announced early retirement and redundancy rounds. But the polar vortex that has engulfed the digital publication, while relatively small in comparison, has left the industry, and journalists in particular, reeling. The long and slow decline of newspapers has been well documented, as advertisers and readers have shifted their attention to digital platforms. But for the companies that were praised for having understood that the social network faster than the legacy media are reeling, a signal is sent too serious for many media companies to contemplate. Many of us are concluding that commercial internet makes profitable journalism exponentially more difficult and, in many cases, impossible.

Media consumption habits in the mobile social web have changed radically. About 68% of adults in the United States receive at least some of their news from social media platforms, and most of them cite Facebook as the primary source. The valuation of Facebook is now over $ 470bn (£ 360bn). The market value of Google has increased from $ 200 billion in 2012 to almost $ 800 billion. Google and Facebook among them dominate the digital advertising market. In the same week that BuzzFeed announced its job loss, Facebook reported record revenues of nearly $ 17 billion in the last quarter of 2018. Despite a year of horrible publicity, of being blamed for contributing to the genocide in Myanmar to a series of scandals around data and Privacy, Facebook's business appears stronger than ever.





Sam Baker and Lauren Laverne, founders of The Pool, a website aimed at women, which closed on Friday.



Sam Baker and Lauren Laverne, founders of The Pool, a website aimed at women, which closed on Friday. Photography: Alicia Canter / The Guardian.

The main mistake that most digital publishers made was to imagine that platform companies, and in particular Google and Facebook, had a serious interest in helping them maintain their businesses. The amount of data that large platform companies collect and control allows them to deliver advertising much more efficiently than any publisher, and the business of making content online profitable is designed against anyone who wants to run a newsroom with limited resources and with experienced reporters.

Peretti's memo for staff after the layoffs was instructive about what it would take to be sustainable: "We can build a profitable media business in addition to Facebook and YouTube," he writes, "but only when the content we do is high. quality, with mbadive scale and relatively low production costs ".

Whatever this content may be, it is unlikely that it will be exhaustive research reports, which are not cheap to produce, nor, in general, are they something that attracts the "mbadive scale". If BuzzFeed, Vice and other digital publishers who suffered despite the advertising market boom can not make the social network work for them, it is likely that those who do will not depend on advertising.

It is also likely that this year's job losses are only the beginning of a new publication depression. In regions like the USA UU., Which has been based almost entirely on a free market for the powerful to hold accounts in the last 70 years, the lack of civic or public resources abundant and well funded is felt particularly marked. In what appears to be an attempt to apply a plaster to an amputation, both Facebook and Google are funding efforts at the local level to increase the resources of reporters and newsrooms through schemes such as the United States Report.

Among them, the digital duopoly is spending $ 600 million over the next three years to support journalism. But the participation of the great technology in serious reports is ethically clumsy and, until now, largely ineffective.

It was not the deliberate intention of Google, Facebook, Twitter and others to drain the advertising group that supported journalism, but they did not care especially if the publishers survived or failed. BuzzFeed had an almost symbiotic relationship with Facebook, collaborating on projects and helping to promote their tools to other publishers. However, reports suggest that after adjusting its algorithm to degrade the news, Facebook traffic to BuzzFeed and other publishers' sites has been drastically reduced.

Many people offer advice on what might work for the media, be it podcasts or newsletters, or have a very small audience, or increasingly popular membership models or new subscription types. And there are real examples of where different models work, especially in the non-profit and specialized sectors. the New York Times Y Washington Post (which operates under the protection of Amazon's billionaire founder, Jeff Bezos) are large, well-funded and have increased their newsrooms when others are shrinking. Both have been successful with the load of reader subscriptions, but there are very few organizations that can replicate their brands or their resources.

The future of journalism will generally be smaller and more challenging in the short term and will remain uncertain in the long term. However, the problem is now so clear that even the most advanced digital thinkers can see it: a digital free market for journalism does not work.

Emily Bell is a professional practice teacher and director of the Tow Center at the School of Journalism in Columbia, New York.


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