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Image: Archi Banal
Image: Archi Banal

MediaMay 5, 2023

Buzzfeed and Vice are in deep trouble. How will NZ’s digital news sites avoid their fate?

Image: Archi Banal
Image: Archi Banal

As two giants of 2010s digital news optimism face oblivion, Stuff is paywalling much of its best work. Duncan Greive assesses the end of a media era.

If you wanted to pick a moment when the last digital news era definitively ended, the past couple of weeks will take some beating. First, Buzzfeed announced the closure of its award-winning news operation. The Guardian reported that founder Jonah Peretti told staff “I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media.”

In response, its share price continued its yearlong swoon. As of today, you can buy Buzzfeed, once considered the most interesting media startup in the world and valued at more than US$1.5bn, for US$90m. For scale, that’s about 25% less than the current market price of NZME, publishers of the NZ Herald.

Then, earlier this week, even more troubling news about a second digital titan. The New York Times reported that Vice, valued at US$5.7bn as recently as 2017, is considering bankruptcy. The irony is inescapable. Buzzfeed and Vice were the brash internet upstarts, businesses that understood the fundamental dynamics of online media in a way that newspaper publishers like NZME and the New York Times never could – yet now the legacy journalism providers are thriving as they report on what looks like end times for the digital giants.

Few saw this coming. Ben Thompson, a technology analyst, wrote in a 2015 post that “BuzzFeed is the Most Important News Organisation in the World” because “link distribution channels, particularly social, are far more important [than the homepage] when it comes to raising awareness of a story”. I don’t raise that to bag Thompson but to show just how much the internet has changed in the past few years. Because the fate of Buzzfeed News and Vice is directly tied to those changes, and New Zealand is absolutely not immune. And two of the most lauded digital news businesses in the world being in such deep trouble simultaneously is something which you have to care about, if you care about journalism.

Thompson’s analysis erred because he assumed that the way social media worked at the time, with wide distribution from individuals to their networks, would always remain. But the era of link-based social media was already dying when he wrote those words, and now Facebook and Twitter are wildly different platforms, and have become, on some level, hostile to news media. The social platforms, once they had hoovered up enough user data, stopped wanting to ever have an audience member leave their site without paying a fee. And thus the commercial revenue that supported sites like Vice and Buzzfeed got stuck further up the pipe.

What does that mean for New Zealand?

As of now, a large majority of New Zealand’s news media is still funded by advertising. But what is less well understood is the extent to which it is actually advertising in print or television that still subsidises freely distributed news content online. As print and television audiences are shrinking faster than ever, the fundamental viability of advertising-funded digital news is disappearing.

This is the backdrop to Stuff’s launch last week of paywalls tied to three of its most important historic newspaper mastheads: The Press, The Post (formerly the Dominion Post) and the Waikato Times. The company’s head of content, former Press editor Jo Norris, explained the company’s thinking on my podcast The Fold. “We have a mix of revenue, which means that we are a long-term sustainable company. But it’s important that we do continue to diversify, and that we grow our revenue from digital subscribers.” She was being diplomatic, in truth. There is no plausible world where Stuff can operate at its current scale in a digital environment without significantly expanding its revenue from audiences. (A shameless but necessary plug: this is also why The Spinoff can only operate with the continued support of members).

The fragility of news in New Zealand is surely well understood by now. The 2020 collapse of Bauer Media, with all those magazine titles, was evidence. So is the recent brutal shutdown of Today FM after a year on air. Outside of radio (for now) funding any kind of scale professional news or entertainment brand on advertising alone now is likely impossible. That was the context behind the now-abandoned merger of TVNZ and RNZ, and the complexity of creating news for digital audiences is why RNZ has been handed $25m a year, in part to bolster its digital news operation. 

The difficulties and audience mistrust associated with the government’s Public Interest Journalism Fund showed that subsidies will always bring complexities when applied to news. So far the government’s attempts to get tech companies to pay for news seem to have made little meaningful progress. Fundamentally, the fading out of Vice and Buzzfeed News is connected to the same forces driving much of Stuff’s journalism behind its new paywalls. The lesson is that the amount and quality of freely accessible journalism is going to meaningfully diminish. And while there are entrepreneurs investing in the space, they are more likely to reflect the interests of their funders and exist on a spectrum from right-leaning, to corrosive to outright conspiracist – further altering the type of conversation we have in this country.

Why news still really matters

There is an argument that this is not a problem. There is still a hell of a lot of great journalism made in New Zealand, much of it paywalled at sites like the NZ Herald, BusinessDesk, the NBR, or ODT. Other parts remain freely accessible – note that news of Meka Whaitiri’s defection was broken by Whakaata Māori. RNZ still exists and is slated to grow, and while there is some tumult at TVNZ, with broadcasting minister Willie Jackson pressing unusually hard, revenue slipping and its CEO having resigned, there is still one of the best newsrooms in the country right at its heart.

Recent surveys suggest that the wider public is somewhat indifferent the fate of the news media. Trust is plummeting across the board, and perceptions of bias are rife. Some of those criticisms are understandable – conceptions of what is news have evolved, and not all audiences have evolved with it. As a result, some New Zealanders might shrug at the idea of journalism shrinking to a niche of the internet, generated for a small, avid paying audience and thinly available in front of paywalls. 

This is increasingly the world we’re waking up to – one in which even the lavishly funded giants of the last digital news era have been humbled. The contours of what comes next are not yet clear, but Stuff’s paywalls are a clear symbol that advertising alone will not save us, and outside of the government’s owned brands, audiences need to think hard about how their news is paid for.

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