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BuzzFeed will end its news operations in the UK and Australia, effectively marking the end of the new digital company’s global ambition to shake up the traditional media.
Once ridiculed for its focus on traffic hoarding “lists,” BuzzFeed became a highly respected medium for traditional media. On Wednesday, he said he was giving up local news and political coverage in favor of the news “hitting big” in the United States.
The company, which had been struggling before the coronavirus pandemic further affected its advertising revenue, has suspended its 10 UK news employees and four in Australia as part of the strategic cut. BuzzFeed launched a local news operation in the UK just over six years ago.
According to sources, it is highly unlikely that those without permission will return to BuzzFeed. BuzzFeed UK will keep staff covering news with a “global audience,” such as its investigative operation and celebrity news coverage, at least for now.
“For economic and strategic reasons, we are going to focus on the news reaching the United States during this difficult period,” the company said.
Therefore, we will notify staff in the UK and Australia that we are not planning to cover local news in those countries. We will consult employees on our plans regarding permits and discards in these regions. ”
The company said the cuts would also affect its flagship operation in the US. As it seeks to achieve savings goals while continuing to produce “kinetic and powerful journalism.” “We [want to] achieve the savings we need and produce the explosive, high-rate journalism our readers trust, “the company said.
BuzzFeed said it was still “investing heavily” in its news operation, with a projection to invest $ 10 million more this year than the division earns, and $ 6 million in 2021.
Launched by Jonah Peretti in 2006, the outlet is among a generation of startups, which also include Vice and Vox, who stormed the world of media only to face financial difficulties as the advertising climate collapsed. As recently as 2016, the company had attracted a valuation of up to $ 1.7 billion.
The unprecedented drop in advertising caused by the coronavirus has hastened the end of a business model that is already struggling. In January, Peretti published a 2,500-word blog presenting plans to diversify the sources of income for the struggling business. Days later it was reported that he had improved his house in Los Angeles, buying a property of $ 5.2 million.
He had previously publicly raised the possibility of merging with other digital publishers to gain the scale to fight more equally with the likes of Facebook and Google, which dominate the digital advertising market.
Less than a year later, three of the companies Peretti was referring to as potential partners had made deals: Vice, which has a more male-focused audience, acquired Refinery29, targeting millennial women, to create a publishing group of $ 4 billion. Vox bought New York Media, which owns sites like Vulture and The Cut, to build scale.
Meanwhile, it emerged in December that BuzzFeed’s international operations, non-US businesses, including the UK, Germany, Australia and Brazil, had seen losses quadruple in 2018. International revenues fell 35%, according to the latest available public documents. . In the same year, BuzzFeed cut a third of its editorial staff in the UK.
At the same time, BuzzFeed News began asking readers to “help shape the future” of its content through donations, a model similar to that used by The Guardian. The support page, promoted at the bottom of the news, solicited donations of $ 5 to $ 100 to diversify and not rely on advertising revenue. The move was described at the time as a way to keep “BuzzFeed News free for everyone.”
The parent company of BuzzFeed, based in the US. In the US, it earns revenue of more than $ 300 million, but has not met annual revenue targets by at least a fifth and has yet to make overall profits. Failure to meet revenue targets reportedly put plans for a possible float of the exchange to pay.
