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On Thursday, in announcing the closure of BuzzFeed News, BuzzFeed chief executive Jonah Peretti concluded one of the most highly visible experiments in ad-supported digital newsgathering of the last two decades.
The ambitious newsroom, which launched in 2011, sought not only to legitimize the reputation of BuzzFeed itself but to prove that an esteemed news operation could run almost entirely on the dime of digital advertising.
The theory ran counter to decades of accrued wisdom: Both on television and in print, news has always been a loss leader, subsidized by other sectors but prized for its ability to attract attention and add reputational sheen, said Jon Miller, chief executive of digital media investment firm Integrated Media Co.
Still, even as other news publishers gradually erected paywalls and moved their most valuable content behind them, BuzzFeed News remained insistent that its reporting would remain free to access.
Along with its peers at Vice Media, Vox Media and Bustle Digital Group, the publisher aimed to prove that with the proper scale and advertising strategy, it could offer quality reporting to readers for free. Indeed, in his memo to staff, Peretti blamed the social platforms for their inability to support “premium, free journalism purpose-built for social media.”
Had BuzzFeed News succeeded, it would have proved an exception to what has increasingly become an article of faith in digital media: Newsgathering is too expensive, and its digital ad yields too paltry, for such a product to survive on advertising revenue alone.
The fate of the publisher reflects a growing awareness that the economics of digital media are not so different from what preceded them, and that few news operations—if any—can exist in the digital era without a complement of alternative revenue streams.
“Margins for media companies producing their own content aren’t the same as those for ad sellers relying primarily on user-generated content and self-service advertising platforms,” said Kate Scott-Dawkins, the global president of business intelligence at GroupM.
This realization has not been confined to BuzzFeed News. In the last year, BDG has shuttered two of its newsgathering operations, Gawker and Input, while Axel Springer has issued cuts or closures at Insider, Morning Brew and Protocol, exempting only Politico and its lucrative subscription business.