Morning Report: What happens after you pivot 180 degrees to video? You turn around.
The Internet is half-ruined at the moment by tangentially-related auto-playing videos firing up whenever you want to read something. They talk at you, mostly about something only near the issue you wanted to read about. Sometimes you have to make them shut up multiple times before they give up. Sometimes they follow you down the page.
It’s not great. But those irksome videos are merely another installment in making the economics of digital publications work. And there has been an ocean of capital deployed into the digital media space that is still hunting for returns.
But worse than autoplaying videos is watching publications shift their focus to video at the expense of their written business, only to then fall apart.
Take Mic’s pivot to video, which required a cut to its writing staff in the process. The success of this pivot is, as this headlines indicates, debatable: “Millennial publisher Mic.com says comScore data showing a shrinking audience is wrong — and it exposes a critical disagreement in digital media.” In short, the company claims reach on social networks for its video content, at the expense, it seems, of its on-site traffic.
It’s hard to get too cheery about a publisher giving up its own platform.
However, there’s more bad news, as is par for the media course. Out this week is sad news concerning Cracked. While Cracked isn’t a news site, the lessons are the same. Here’s Splinter’s depressing summary:
This week, the humor site laid off a majority of its staff in the latest sign that ad-supported digital publishers are withering on the vine.
Twenty-five employees were let go, according to Kari Wethington, a spokeswoman for E.W. Scripps. She added that the onetime magazine, which in recent years has built out a robust YouTube presence in the hope of cashing in on video revenue, will now pivot back from its previous pivot and resume producing more written content.
So much for that.
All this fits into the bad news coming from the highest-valued media startups: Buzzfeed ($496.3 million in funding) will miss its 2017 revenue goals despite its pivot; Vice ($1.42 billion in funding) will miss is 2017 revenue goals despite this focus on video; and Mashable just sold for a fraction of its prior valuation after its own pivot to video.
It’s all incredibly depressing. The good news is that the largest publications — the Times and the Journal — are shoring up their walls with growing subscription incomes. Even some smaller sites (The Information, TPM, PoliticalWire, and others) are seemingly pulling it off. And Medium’s own clap-based payment system has shown some early signs of life. Those are all good things.
But it seems that we are going to need more digital subscriptions in our personal lives if we are going to keep as much media alive as we would like. At least if we want it to be any damn good.
From The Crunchbase Daily:
Compass secures $450M from SoftBank
- SoftBank strikes again. This time, the firm is backing a massive $450 million financing for Compass, a five-year-old online real estate sales and rental platform, at a reported $2.2 billion post-money valuation. The new investment brings total capital raised by New York-based Compass to $775 million.
Moda Operandi raises $165M
- Moda Operandi, a high-end online fashion retailer, has raised $165 million in a growth capital financing round led by Adrian Cheng and Apax Digital. New York-based Moda plans to use the money to expand its footprint in the Middle East and Asia and to build up its online showroom and stylist offerings.
Tax bill will affect startups
- Startups are generally unprofitable, so corporate income tax cuts won’t impact their near-term finances. However, expected tax code changes are likely to have a ripple effect in the startup ecosystem, impacting M&A activity, employment decisions, and availability of investor capital, Crunchbase News reports.
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