The Digital Double Standard

Here's the way I see it: The difference between old and new media publishers (or traditional and digital-native publishers, if you prefer) is that, while both struggle to stay afloat, some new media companies just don't quite realize it yet. I've been thinking about the economics of all publishing in recent weeks as more and more bad news has come out of medialand. Condé Nast, for instance, announced it was shuttering the print edition of Teen Vogue and cutting back the frequency of many of its glossies (e.g., Architectural Digest and GQ will go from 12 issues per year to 11). There was also some extreme bad news that came out of the digital-native world: Local news sites DNAinfo and Gothamist (which DNAinfo had acquired only in March) abruptly shut down. But the bottom line there was obscured by some high drama. The prevailing media narrative was that Joe Ricketts, the sites' billionaire owner (a Trump campaign donor), killed them to punish the company's New York-based journalists after they voted to unionize. Ricketts also didn't do himself any favors by taking the sites entirely offline without warning, leading some to presume that eight years' worth and tens of thousands of stories had been vindictively deleted; access to the archives has since been restored. Anger at ham-handed Ricketts aside, the real story there is surely, more or less, what he said it was in his shut-down memo: "DNAinfo is, at the end of the day, a business, and businesses need to be economically successful if they are to endure." Ricketts and his business team just couldn't figure out how to do that. Really, I wonder how many digital-native publishers have truly figured out how—posturing for investors aside. (Ricketts, I guess, got tired of posturing to himself, telling himself that he could make the business work.) And here I have to point out another key difference between old- and new-media publishers: The latter are still, circa 2017, generally given a ridiculous amount of leeway (ironically, often by old-media types) when it comes to gauging success. Or to put it another way, traditional publishers have to demonstrate discipline. Digital natives often have to demonstrate ... something else. Consider, for instance, the media narrative that surrounds BuzzFeed. Its aura, such that it is, still has to do with its continuing ability to attract major investment dollars on the way to an anticipated 2018 IPO. The fact that NBC Universal invested $200 million in BuzzFeed in 2015 and then again in 2016—that vote of confidence is what matters, right? Is BuzzFeed spending all that cash wisely? Who knows. In June, Bloomberg Businessweek's Gerry Smith wrote about the resources BuzzFeed is plowing into video and TV production in a piece headlined "The One Big Reason Why BuzzFeed Needs to Break Into TV." The story's subhead, "The company's future may hinge on whether it can get young viewers to spend 23 minutes watching someone eat a $100 doughnut," basically reveals that reason: BuzzFeed needs to figure out new ways to make lots of money (and simultaneously demonstrate, uh, synergy with its benefactor NBCU). Because you know that whole native advertising thing that BuzzFeed has been relentlessly hyping for years while disparaging standard banner advertising? In late August, BuzzFeed quietly acknowledged that, yup, it would start accepting good old-fashioned banner ads—including banner ads placed programmatically (as of this writing I'm seeing home-page ads for Kohl's and Verizon). Shortly after BuzzFeed got its second $200 million infusion from NBC Universal, a BuzzFeed employee told me, "So I guess I don't have to start looking for another job yet." There was the sense, he told me, that all that cash created a cushion that would allow BuzzFeed to continue to figure out its strategy. It "bought time," another BuzzFeeder told me, "and room for error." Until, of course, the IPO and the increased scrutiny that going public brings. Meanwhile, traditional publishers have zero room for error, and get all kinds of heat for making tough decisions. (If you think Condé Nast is stubbornly clinging to print, you're wrong. The frequency change is about cutting back to profitable issues—yes, print still makes money—and using the savings to continue to grow digital revenue.) In the end, traditional and digital-native publishers are trying to figure out the exact same things: (1) how to effectively monetize their audiences (the timeless publishing challenge) and (2) how to eke out an existence in a digital advertising ecosystem dominated by the Google-Facebook duopoly. These are existential challenges for every publisher. For a while, the new kids on the block had us all convinced they'd figured out what the supposed dinosaurs couldn't. Heading into 2018, I have to ask: Do you still buy that?

The Digital Double Standard

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