Buzzfeed, With Nearly $500M In Funding, Asks For Contributions

Digiday has reported that Buzzfeed is testing a donation button on Buzzfeed News, which was recently relaunched as its own web entity.

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So what’s with a VC-backed media publication asking for contributions? As previously reported by Crunchbase News, Buzzfeed, and the digital media scene in general, has struggled to pull in revenue.

At the behest of platforms like Facebook and Google, Buzzfeed, Vox, and others have rushed to pivot to video, adopt new story formats, and implement technologies like Google AMP and Facebook Instant. None of these moves have seemed to garner the cash needed to impress investors, advertisers, or readers, however.

Neither Buzzfeed or Vox Media have raised additional funds since 2016 and 2015, respectively. And both have gone through layoffs this year. This is all despite a startup environment that is rife with money for late-stage startups.

Aside from lackluster pivots, part of the reason for a contribution model could be attributable to Buzzfeed’s missed revenue expectations. According to the Information, “BuzzFeed missed its revenue target in 2017 by 15%-20%.”

But while new media appears to be struggling to find its footing, old media appears to be finding success in rebuilding its foundation.

At the time of Buzzfeed’s $200 million raise in November 2016, the New York Times was trading at $12.85 a share. Today it closed at $23.75 with a market cap over $3.9 billion. On February 8, 2018, the newspaper reported it had 2.6 million digital subscriptions, putting its subscription revenue for 2017 over $1 billion. Buzzfeed’s revenue is estimated by Owler to be at $220 million a year.

News is a tough business to be in. And publishers are going to have to continue to experiment with new ways of making money while maintaining editorial independence. And so far, it appears those publishers best suited to the task refrained from embracing digital in the first place.