Monetising is the new elephant in the newsroom

Once hailed as the ‘future of journalism’ and fondly referred to as the ‘digital darlings’, Buzzfeed and Vice Media entered the journalism market with a bang, promising to topple legacy media and take over journalism for good.

They defied conventional wisdom with their bold and unusual approaches that included viral cat videos, listicles, colourful, mouth-watering cooking videos and a business model that relied majorly on social media.

Investors, excited at the idea that these digital newcomers would replace the New York Times and Guardians of this world, beat a path to their doors and literally ‘poured money’ on these outfits that boasted of millennial and Gen Z audiences.

Flush with cash, they experimented with crazy ideas but also did some fantastic journalism that won them several awards, as was the case for Buzzfeed news.

But the joy – and buzz – was only for a moment. In recent months, we have seen the unbelievable fall of Buzzfeed and Vice, shattering all hope we had about a social media-based business model.

In April, Buzzfeed announced it would be shutting down its news department, which was launched in 2018, after securing millions of dollars from investors.

Sadly, the social media-based model, which was supposed to be Buzzfeed’s saving grace, became its Achilles heel, as social media networks would change their algorithms and no longer promote news stories.

Vice Media, once valued at a staggering US$5.7 billion, recently filed for bankruptcy and was this week bought at a ‘paltry’ US$350 million. Vox media, another digital entrant, also announced that it would be laying off seven per cent of their staff.

Advertising dollars

Even though Vice and Buzzfeed had attracted millions of online readers, it still was unable to monetise the audiences, largely due to their over-reliance on Big Tech, which gobbled up nearly 70 per cent of the advertising dollars. Now that it appears the age of Buzzfeed, Vice and Vox is nearly behind us, what does this mean for digital journalism?

Models that seem to be working include a philanthropy-based one that is currently sustaining outlets such as ProPublica.

The membership model, in which readers pay a discretionary amount to support journalism, appears to be working for The Guardian, which is principally supported by a large endowment from the CP Scott foundation.

The New York Times is growing its subscription numbers from non-news verticals such as; cooking (NYT Cooking), puzzles and product reviews (Wirecutter).

Still, some like the Wall Street Journal are relying on their impenetrable paywalls and subsequently subscription fees, thanks to their catchment of moneyed readers. Then we have news outlets such as the Washington Post that depend on a benevolent billionaire – but for how long?

One of the toughest jobs on earth right now is to figure out how to make digital-based news sites commercially viable. Just when we thought we had cracked the code; the business model came down tumbling. What can I say, except that digital journalism is a painful process of learning, unlearning and relearning – whatever that means.

- Dr Chege is a media and technology researcher.