Buzzfeed and canaries in coal mines…
As I read all of the reports (see below) on the death of, er, layoffs at Buzzfeed and what it means for the future of journalism and Media (capital M), I can’t help but feel that these problems are the canary in the coal-mine for film. Why?
As the Columbia Journalism Review summarizes so well, most people are blaming Facebook for these problems, “But if the giant social network is partly to blame, it is mostly because editors at BuzzFeed (and many other places) yoked themselves so tightly to Facebook’s wagon…” And as any business school professor will teach you – if your business model depends on the business model of someone else, you are in danger when you no longer fit their business model anymore.
For Buzzfeed and similar publishers, they felt they had to lean-in (pun intended) to Facebook because there was no other choice – it’s where most of the eyeballs go, and with them, most of the ad dollars. But then you lose the direct connection to both your advertisers and your viewers. Ok, fine, you think – we’re building our brand, getting our content seen, and can leverage it later. But that didn’t work out so well.
In a sense, these publishers were making “original content” for Facebook, and once Facebook realized original content from its users (for free, no less) was more valuable, it didn’t need the content these publishers were providing. But the publishers can’t get the eyeballs or advertisers directly, and there’s no one really waiting in the wings to replace Facebook, so they’re screwed. Unless you are a niche publication (like The Information) that has built a small but loyal audience, and you know who they are, and they pay you to keep in touch (via subscription).
Likewise, every distributor (and aggregator) has been going to Netflix because they have the eyeballs and the money (not via ads here). But Netflix realized it could make its own original content and cut out these publishers, and that’s what they’ve been doing. So now everyone races to license their content to Amazon. In fact, when I speak with distributors, they pretty much admit it’s the only revenue source they can count on right now. But Amazon has also been slowly moving towards making their own content meaning you are also soon to be screwed (they’re also making their own products and brands, so you are in the same boat if you happen to be selling anything else, btw). They been scaling back Amazon Prime Video Direct already, and don’t count on that being the end of their purge.
But to make matters worse, like publishers, most film distributors and “content-holders” (and even producers for that matter), haven’t built up their brands or their connection to their audience. So, few people will subscribe to them directly, and the revenue from AVOD won’t ever be able to replace what they made from their now-disappeared or soon-to-disappear partners.
Unless you are that rare brand – Criterion (or filmmaker – Gary Hustwit) who has built their own brand and direct-to-consumer relationship, you are fucked. Or maybe you’re that lucky 1% of producers/filmmakers/studios who make stuff that is good enough to be “must have,” meaning you are A24, or Shonda Rhimes or one of about, oh, twelve other folks out there and you’ll be just fine. But that’s a small group of smart, creative people.
The rest of us are left hoping that as Netflix, Amazon, Disney and WarnerMedia move away from needing what we make, that maybe someone will fill the void and that becomes an opportunity. Right now, that looks like Apple to some people, but ask a few publishers what that feels like. Some say it’s the broadcasters, but we know what content they like to buy already. And some say it’s services like Pluto.tv, but I’m betting those will be “pennies replacing dollars” deals.
I’d like to say that you’re only screwed as a distributor/publisher. As a creative/filmmaker/producer, you can just work directly with Netflix or Amazon and be fine.. But then I hear stories of how slow Netflix is to pay, and how banks are starting to deny loans to cover that gap given how much debt Netflix and their partners owe them already. And then I look at the reality TV and HSN type shows Amazon is launching. And then I just stop thinking about this stuff before my head explodes.
Of course, canaries in coal mines die a long time before the rest of us. I mean, Amazon and Netflix spent tens of millions at Sundance this year. Things are looking good. And let’s face it, they are the only games in town, so we gotta be there.
But as Warren Buffet says – it’s not ‘til the tide goes out that you learn who is swimming naked. And the time to think about these changes is before the tide goes out.
What I’m Reading: Film –
Disney gave some more clues about its plans in its Q1F19 Earnings results webcast. Not too secret, but Bob Iger thinks their brands will help them cut through the clutter: “Presented with an over abundance of choice, consumers look to brands they know to sort through the options and find what they actually want. The DTC space is no different in that regard and we are confident that our iconic brands and franchises will allow us to effectively break through the competitive clutter.”
Apple is now telling various studios and networks to be ready for launch in mid April. And like Disney, they’re relying on being a family-friendly brand.
Because we need more streaming: MGM-owned Epix jumps into the streaming service arena with EpixNow
TVOOT is launching a crowd powered social tv platform that may help cut through the clutter. Don’t know what to watch? Ask your friends via VOOT. Think this might work? Support them on Kickstarter. My favorite feature – it automatically switches your screen to your favorite back-up channel during commercials, and brings you back home when the commercials are over. That should go over well in court.
The Information thinks Quibi is going to have trouble meeting its (short form) streaming content goals. But my bet is people will take the money, and they’ll have no issues when it starts to work (again, if he can keep Meg out of the way, sorry…).
If your lawsuits might not work, join forces with your enemy’s enemy, which is what ChooseCo (Choose your own Adventure) is doing with Amazon.
Games are also moving intro streaming, and will undoubtedly face the old problems of video streaming? Especially with console exclusives? There is no doubt that any subscription service can offer an overwhelming amount of content, but is that what the consumer actually wants? And how will they sort through all of these options?
I was just in Salt Lake City for work this week, and the Deseret News has a pretty good update on the current state of MoviePass and their plans to survive for the future.
What I’m Reading: Media –
More Buzzfeed News: Per the above, I’m swimming with the fishes and thinking about Buzzfeed a lot this week. Some are already asking – with Buzzfeed failing, who is going to swoop in and take over the fledgling digital media company?
The Hollywood reporter suggests that the big media companies (Disney, Viacom, Comcast etc.) should swoop in and buy in. Me: but why should they when these companies were not particularly good to begin with and are near death because they never had a sustainable business model? I smell another AOL/Time-Warner but as BuzzFeed/?.
Adage makes a similar argument that these layoffs shouldn’t come as surprise since these digital media companies like Buzzfeed were never particularly noteworthy to begin with being that relied on community created content rather than actual journalism.
So maybe they should look at the old guard? While most of the new media organizations are failing, the NYT is thriving: the times reports (on itself, so be aware): “BuzzFeed generated more than $300 million in sales, while still bleeding money, and The Times was on a pace to exceed $650 million in digital revenue.” Why? Maybe because the NYT never relied solely on Facebook for traffic, or ads for revenue. But – considering just how often the NYT has screwed up its approach to digital, even with the war chest of money they’ve got, it’s odd to point to them as any model without being prepared to second-guess yourself soon.
BuzzFeed cuts should mean the death of metric-obsessed media says the Columbia Journalism Review, which also has a bevy of links to more coverage on the issue at the end of the linked article.
Journalism Isn’t Dying. It’s Returning to Its Roots – A good argument that we’re really back where we should be with hyper-partisan news, funded by (pissed-off) subscribers.
Maybe Apple sees the future of journalism? And that’s taking 50% of news revenue generated through their platform. Magazines support it, but Newspapers fine the model to be unfair. I agree – the only people who like this deal are likely close to death anyway.
What I’m Watching: Branded Content:
Brand Storytelling Partner Showcase online: For those of you who’ve read my posts about Brand Storytelling, and weren’t able to attend and want to know what it’s about, you can watch many of the partner presentations on the Brand Storytelling Partner Showcase on their YouTube Channel.
Creative Coupling: Just in time for Valentine’s Day ,REI has a great new podcast interview with Chai Vasarhelyi and Jimmy Chin about their film, Free Solo, which is interesting on its own, but what makes it more worth your time is that it asks what it’s like to make a film like this as a married couple with kids? Some great thoughts here on the collaborative creative process. (disclaimer, I consult w these folks, but not on this).
