Newsrooms that shrink
There is no industrial, cultural and economic sector that has not been affected by digital disruption, and journalism, of course, is no exception. Last Sunday, David Carr of the New York Times wrote an article entitled «When the Forces of Media Disruption Hit Home,» to address the issue of this transition, watching it from inside the newsroom. Carr talks about how hard it is to see shrinking newsrooms, losing talented and esteemed colleagues – in October the NYT decided to cut 100 out of 1,330 employees – even though this process appears to be inevitable. Although the writer is aware that things, in a scenario dominated by a market with new rules, could be a lot worse (in other sectors as well as in journalism, the NYT remains strong, after all,) it is, however, difficult to quantify economically some values of the profession, in light of this new currency. «We need to adapt quickly to new protocols,» Carr says, «but we can’t lose the core, the journalism that makes The Times The Times.»
The numbers, lined up outlet to outlet, by Joe Pompeo of Capital New York, reveal a major reduction of journalists employed only in newspapers in the United States. According to the American Society of News Editors, today there are only 36,700 journalists against 55,000 in 2008, when the economic crisis and the instrumental and cultural shift (both for journalism and for advertising) accelerated this trend. According to Dave Winer, in response to Carr, newspapers like The Times should realize that their value is forced almost naturally to contract if they do not «have to let more of the world in. Or eventually, the world will invent what you have with a different name.» Mathew Ingram, instead, believes that the question is not so much about counting journalists or copies lost, rather it is about considering how journalism in general is growing thanks to new possibilities. Former New York Times managing editor Jim Roberts – Ingram explained – went to strengthen Mashable on hard news. In the same way, former New York Times executive editor Bill Keller and his The Marshall Project (previously discussed here) are hiring. «The journalistic landscape has broadened, and that’s a good thing.»
Investments that come and go
This week there have been some important announcements. The Altantic has a new senior editor, Gawker has started looking for an executive editor, BuzzFeed is launching a newsroom in the Bay Area – straight toward Silicon Valley – and has hired Mat Honan, formerly of Wired, and Daniel Kibblesmith, associate editor of the satirical website Clickhole. While in Sweden – and in Italy – various strategies have been launched to attract money and readers through lightweight content with high virality, in the staid and longform sector (based on long articles and ‘deep’ reportage) there is a high birth rate of new projects and an equally high mortality. This week, Chris Ip of the Columbia Journalism Review has analyzed the longform market.
“Longform” has become a buzzword that has made, to “fetishization” extremes, the length of the articles offered on specialized websites – James Bennet, editor in chief of The Atlantic, explained – enough to risk making the content useless or unfulfilling, from the cultural and commercial point of view. Despite new projects such as the ones of the former NYT executive editor, Jill Abramson and Latterly Magazine have appeared on the market, for someone who works in this sector «there’s so much longform in the world,» as said by Glenn Fleishman of The Magazine. «There’s so much to read that’s so good, and that’s essentially free with ads, that we are irrelevant. Why would anyone pay?» His venture will close this month, after losing more than two-thirds of its subscribers. The same fate for Byliner, The Atavist, and other projects that we mentioned a few months ago, when there was a “longread wave“.
For some, however, money is pouring in. One of the news items of the week was the refinancing of $46.5 million of Vox Media by General Atlantic.Vox Media is an American online publishing group (previously mentioned here) known primarily for publishing websites like The Verge (specialized in technology,) SB Nation (sport,) Polygon (video games) and Vox.com – the most recent one created and directed by former Washington Post Ezra Klein and dedicated to explanatory journalism. The news has some relevance, because with this new investment the value of the Vox group reaches an estimated $400 million – $150 million more than the Washington Post, taken over by Jeff Bezos for $250 million, which is considered a reference point for comparing all investments of the same level. Currently, the value reached by Vox – which has 350 employees – is about 7 times the expected revenue for 2014, a discrepancy that shows how much the market wants to invest in the platform – explains the CEO Jim Bankoff announcing the news to the staff on Linkedin. «Magazines and newspapers are starting to be disrupted. Cable networks are next. I think a lot of investors look around and say, ‘This is a new opportunity.»
Advertising that runs
The real opportunity is represented by the new advertising scenario. It is no secret that in a market full of relatively free content for the reader, the advertiser often represents the economic base for these companies. Vox Media is working hard to make itself attractive for new investments (starting from the Vox Creative project) proposing – as explained by Brian Stelter of CNN Money – a high-quality product attractive to advertisers.
According to Peter Kafka of ReCode, Vox Media declares the same monthly upstream visits as BuzzFeed (an audience of 150 million visitors) collecting more or less the same amount in economic terms, but with a total valuation which corresponds to half of that of the website of Jonah Peretti (about $850 million). Chris Sutcliffe of TheMediaBriefing wonders how this is possible. Sutcliffe thinks that BuzzFeed makes easy, natural and shareable native advertising on its website «with the advantage of being tailor-made for social media» as any other content of the outlet, making itself more palatable to those who want to invest their money in innovative spaces and projects. A relevant advantage, now that it turns out that 56% of online advertising is not seen by users.
According to a study by Google on ad-viewability, more than one user in two does not see the online ads. It is an element on which the company of Mountain View, by the admission of Phil Miles of Google UK, wants to work together with publishers and advertisers «to make viewability a bigger part of the ad trading ecosystem.» According to some estimates, Google and Facebook together represent more than half of the digital advertising market in the United Kingdom – to be exact, 50.8% of the total expenditure planned for 2015 on websites, smartphone, video and social network. According to eMarketer, the commercial presence of the two companies in the UK advertising market is more or less equal to that of the global advertising digital market. Hence, the need to invent new tools to attract investment, which in the meantime is going elsewhere.