None of this is surprising. It was always supposed to go this route. Big VC-funded (or not) digital media companies will eventually have to choose between:
- Getting bought by a bigger, older player who lost the plot ages ago but still has the moolah
- Downsizing until profits start trickling in
- Shutting shop
Internet is no country for big digital media enterprises. It’s highly likely that it never will be. The economics just don’t make sense.
Content creation (plus news and reporting) used to be the prerogative of a select few, and that’s how enormous media houses were built. Mind you, not everyone of them was profitable. Companies like Conde Nast and several others served as big trophies for their owners who had other money-making businesses and didn’t care about making money in this business. But what they did get was exclusivity and prestige at a scale unlike no other. And, of course, audience too. That’s why they never had problems getting advertisers on board.
Everyone got a piece of the advertising pie.
The world wide web turned all that upside down. It caused an extraordinary shift in the content creation, publication and monetization process, right from giving resources to talented individuals to create and distribute phenomenal content easily, to helping them make money quickly through programmatic advertisements. Suddenly the number of people who wanted a piece of the advertising pie became unimaginable.
The number of advertisers also grew over the years but couldn’t possibly keep pace. So the pie did get bigger but there continued to be way too many people wanting to eat it.
The only way a new media publisher could survive this, and stay independent, was by keeping costs low and staying sustainable, and building a loyal audience slowly and steadily. That required one important thing: NOT taking VC funding.
The likes of BuzzFeed, VICE, Mashable, Mic, etc. took millions of dollars of funding from people who hoped that they would grow exponentially and become the big new age media brands that people will flock to, and advertisers will pay a premium for that.
They did become big but for every such big content company, there were hundreds of thousands of smaller players who also had reach, and created content which was sometimes as good. So the advertisers never lacked options.
The days of big, marquee media conglomerates is over. On the internet, small is the new big.
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