Gawker closed on Monday of this week in the wake of its bankruptcy. A day later, rival BuzzFeed revealed it is splitting into two units, formally separating its news and journalism from the website’s entertainment and video content.
The company’s film studio, BuzzFeed Motion Pictures, and content such as lists and quizzes will be wrapped into a new unit, BuzzFeed Entertainment Group, to try to get more from digital videos (which YouTube and Facebook are the major outlets).
But there is another imperative at work — BuzzFeed’s ambitions for US$250 million of revenue by this year has fallen badly short. It, like its analog rivals such as print and free-to-air and cable TV companies, have been left behind by the rapid growth in Facebook, Snapchat and Instagram (as well as Google) and the flow of ad revenues and eyeballs to them and away from the likes of BuzzFeed and Gawker.
The split was first reported by Vanity Fair in an interview with BuzzFeed CEO Jonah Peretti, who followed up his comments with a memo to staff overnight Tuesday. In it he reportedly said the split would simplify operations and “allow us to be better at entertainment and better at news”.
BuzzFeed’s move is further evidence that pure online companies (the original “disrupters” for legacy print and TV) are not exempt from those same pressures dissecting the old-fashioned analog media companies. Others will watch and move to follow if BuzzFeed’s move strikes gold. It’s a recognition that being edgy and wholly online is no protection against the forces sweeping through media.