BuzzFeed founder and chief executive Jonah Peretti says that traditional news businesses which are “opportunistically” attacking Facebook and Google only have themselves to blame for their demise after choosing not to invest more in digital despite “decades of massive cashflow”.
Peretti, 43, has been one of the most influential figures in shaping the digital information landscape, having been a co-founder of the Huffington Post (now HuffPost) before launching BuzzFeed in 2006. Today it registers 9bn monthly content views across all platforms, substantially more than any other publisher. It has 200 million unique monthly users of its website, and with its valuation at $1.7bn it is considering the option of an IPO (initial public offering).
BuzzFeed straddles entertainment and news in a voice that has given it unrivalled appeal to millennial audiences. Peretti is based in Los Angeles, where BuzzFeed Entertainment Group is attempting to work out the future of digital video from its base at Hollywood’s Siren Studios. But BuzzFeed has also developed into a major force in global news, drawing on a network of 19 content bureaux around the world and a total staff of 1,600.
During a tour of some of the European offices this week, Peretti gave an exclusive interview to The Drum over lunch in London.
BuzzFeed now has mainstream and cross-generational appeal through a variety of formats such as the food channel Tasty, now the most successful page on Facebook with 87m likes, and Peretti denies that it was his original intention to be merely a destination news brand for millennials. “Our goal wasn’t to be a youth brand, our goal was to be a modern media company that used the technology and the platforms and the approach that made sense for today’s world.”
His business philosophy is informed by data-driven study of user behaviour, underpinned by a long-term view and a certainty that the internet is the future. “The trend that is easy to forecast in broad terms is the internet – more things are going to be transformed by the Internet,” he says. “You have to think, ‘What does that mean and how will that affect news and entertainment and product?’, and I tend to take a long term view of building towards that.”
Legacy media vs Facebook and Google
Legacy news businesses, he argues, certainly did not think long term and have been out-thought by companies that did, notably Facebook and Google. While many publishers have come forward to accuse these Silicon Valley giants of foul play in their domination of advertising revenues, BuzzFeed talks of them as valuable partners.
“A lot of the traditional media players are opportunistically attacking Facebook and Google because Facebook and Google have figured out a better model for delivering information and entertaining people which is real-time, personalised, shareable and global – all these things that you can't do in broadcast and print,” he says.
“These traditional media companies have had decades of massive cashflow and they decided to stockpile that instead of investing in digital. They just kept managing earnings on their traditional businesses even though we have known for 20-plus years that the internet was going to be a big thing and now all these things have unfolded, with some surprises but in a way that was not that hard to predict. Now we are at the point where Facebook’s and Google's revenues are starting to be a substantial portion of the pie, they are attacking them, saying it is unfair.
“The truth is that Facebook and Google have always taken a long term perspective – so has Netflix, so has Amazon – that the internet would win out in the end. A lot of the big media companies always took a quarter-to-quarter perspective, a maximise earnings perspective, and that has resulted in them being in a tough position and so they attack Facebook and Google because of it.”
Although Peretti concedes that the broader pressures on funding journalism present “a real problem that everyone in the ecosystem needs to figure out”, he credits Facebook and Google with taking steps to improve the current position. “I think Facebook and (Google’s) YouTube will start to invest more in news, and they already have started to, which will be good for us because it’s free and scaled out.”
As more news publishers choose to put up online paywalls and fund their journalism through subscriptions, so BuzzFeed News will grow in reach and importance, he thinks. “It is an advantage for us because there will only be a few who will be able to do that super scaled out global model and I think we are in a good position. If more premium news sites put their content behind a paywall, it could be a good move for them from a business perspective but it makes it harder to be the paper of record and to reach the new generation and have as much impact. And so I think our model will actually be a great piece of the news ecosystem.”
Is BuzzFeed in the news business or entertainment?
Peretti’s location in LA has been interpreted as a sign that BuzzFeed’s future is as an entertainment company and that its commitment to news will inevitably fall away. In refuting this, he again references the distributors. “It's very important to our relationships with the platforms, with Facebook and Google, who realise that people getting good information is critically important for the world and their missions. It is some of our most popular content, particularly in the really trying times that we are living in. News is more more important than ever.”
A big news story “drives repeat visits in a way that entertainment doesn’t”, he says, adding that the output of BuzzFeed News is a “source of great pride” for staff in all sections of the company.
BuzzFeed’s internal calculations reportedly predict revenues of $350m for 2017, up 35% year-on-year. The publisher has also received $400m in investment from NBC Universal since 2015. “We are big enough to have a news division and an entertainment division and they both can thrive and they are not in competition with each other,” says its founder.
Indeed, BuzzFeed is committed to greater innovation in news. “We are starting now to develop our news business in a more focused way.”
Facebook is again a crucial ally. BuzzFeed News officially partnered with the platform to cover the UK general election in two programmes made in the London newsroom and shown on Facebook Live on the night of the poll and the morning after. The first, Election Night: What Happens Now, was hosted by the BuzzFeed UK political staff and featured grime MC Tinie Tempah. It registered an impressive 746,000 views. The second, Election Live TL;DR (the title is social media shorthand for “too long, didn’t read” and is a swipe at the all-night coverage of traditional broadcasters), garnered over 1.2m views. BuzzFeed was also Facebook’s partner for live coverage of the EU Referendum poll.
A symbolic development for BuzzFeed’s journalism is the new real crime television series, What Happened to… Jessica Chambers? This docuseries is the first television commission for the BuzzFeed Motion Pictures division and originates from the work of BuzzFeed News reporter Katie J.M. Baker, who investigated the mysterious death of Ms Chambers, a Mississippi teenager who was set on fire in 2014. The show will be screened by the cable channel Oxygen, a subsidiary of NBC Universal (NBCU).
Growth ambitions and IPO prospects
Peretti says that BuzzFeed and NBCU, one of the biggest news operations in the world, are also “working on something around news” in a more general sense. Already, BuzzFeed’s recipe video franchise Tasty (part of a series of BuzzFeed sub-brands that includes Nifty, based on DIY, and Bring Me, dedicated to travel) is screened on NBC’s mass audience Today show. NBCU and BuzzFeed also partnered to produce content on Snapchat Discover for the Rio Olympics and will do so again for the 2018 Winter Olympics in South Korea.
Peretti says that he is seeing the total amount of time people spend watching BuzzFeed videos “go up a lot” on both Facebook and YouTube. “I think that the platforms are valuing watch time and optimising [video] more and consumers are getting used to having video on a platform like Facebook.”
Analysis of the way consumers engage with video led BuzzFeed to steer away from the industry norm of around three minutes in length and go for shorter and longer formats. “We realised we should be making 40-second videos for reach and 12-minute videos for watch time,” says Peretti. While a Tasty recipe clip for Facebook will often be under one minute and achieve 1 billion views, the popular BuzzFeed Video Worth It series, also focused on food, is longer form and more than 70 per cent of its millions of viewers on YouTube watch the episodes in full.
Globally, BuzzFeed operates on more than 30 social platforms. Figures from analytics company Newswhip this month show that BuzzFeed is second only to Fox News for engagements on Instagram (another example of its closeness to Facebook, owner of the photo-based platform).
Whether BuzzFeed would grow stronger from an IPO is not clear. A detailed analysis by Variety this month expressed some scepticism, especially after Snap’s troubled IPO this year. Peretti only says that it is an option: “We would do it if we were ready to do it and it felt like the right thing to do.”
BuzzFeed’s current ownership structure is seen as an advantage to its journalists, who operate under the humble slogan “Reporting to You”. Peretti, anonymous in a grey hoodie as he eats his pasta and salad, doesn't look like a media baron. “It is a real issue where you have media grow out of wealthy people who buy for power and influence and their connections in national government,” he says. "My background was in tech and education, it’s not like I’m going to get a phone call from a powerful buddy and [then] say ‘Sorry, I’m going to change our coverage’.”
Maybe not, but he clearly has immense wealth and influence.
Earlier in the day he had been at Downing Street, not to see the prime minister but to meet tourism chiefs anxious to understand BuzzFeed’s capacity to decide the spending decisions of young travellers.
The Trump-Russia report
Earlier this year, Peretti and BuzzFeed did come under enormous political pressure after controversially publishing an entire 35-page intelligence report about Donald Trump’s alleged past activities in Russia, even though BuzzFeed’s editor-in-chief Ben Smith admitted “there is serious reason to doubt the allegations”.
In view of what has been learned about Russian interference with American democracy from fired FBI chief James Comey, does Peretti feel vindicated by the decision to publish? “Our goal or aspiration is not to have stories vindicated,” he replies. “That document was animating the conversations and decisions of the most senior people in government and media, people were referring to it obliquely and the public were totally in the dark. Our reason for publishing it was not that we hoped everything in the document would be true or not true, it was to get at the truth and to show people what was being discussed and what the president-elect was being briefed on. That was the original reason why we published it and that still is the reason why we stand behind our decision to publish it.”
Trump was livid at what he regarded as an unjustifiable slur on his character and, although he has not sued, he publicly denounced BuzzFeed as a “failing pile of garbage”. BuzzFeed used the comment as a slogan for a limited edition line of merchandise. Peretti is unconcerned by the risk of being frozen out by the Trump administration. “Anyone who does reporting that the White House doesn’t like ends up being called ‘fake news’ and attacked and at various points having access restricted.”
BuzzFeed News returned to the subject of Russian intrigue this month when its London-based investigative team, led by Heidi Blake, reported in detail on the Russian connections to 14 mysterious deaths on British soil. Peretti cites the work as an example of content that crosses BuzzFeed’s network of 11 international editions. “That’s something that’s of local interest but also benefits our US operation and those in Australia, Brazil and across Europe.”
It's the kind of serious work that offsets BuzzFeed’s reputation for lighter material (originally pictures of cats, more lately Millennial-skewed lifestyle content presented in quiz format).
BuzzFeed has a fundamentally different tone from more established news media, Peretti says. “We tend to be like we are your friend…who helps you navigate through the world, as opposed to being the authority who tells you what to think.” This same tone is applied to - and is fundamental to the appeal of - BuzzFeed’s branded content, a core part of its income.
The founder also claims that the commercial team has had a breakthrough (“we really cracked some things”) with its new BuzzFeed Audience Engine, also known as “Bae”. The engine allows BuzzFeed to “pitch creative ideas informed by data…so we can look across all the things we have ever published and pitch ideas to a client saying ‘These are the things that are going to work’.”
Bae also happens to be modern slang for “babe”.
But Peretti, who never wanted a solely youth brand, knows that his growing empire is attracting an older demographic. “I think that our audience is digitally native people,” he says. “That group is going to get bigger and bigger and in 20 years you will have people at retirement age who are digitally native.”
And, taking the long term view, he says that BuzzFeed will still be serving that wider audience with news content as well as entertainment. “We have a lot of great bureaux around the world and building out a global news network is a big part of the strategy.” IPO, or no IPO.