Michael Wolff on Who'll Win and Lose in Digital Media's Mindless Rush to Video
"We want to do TV, but we want to do it in a different way," BuzzFeed's Jonah Peretti has said, but sinking ad rates force desperate web outlets to chase television dollars with no strategy: "We don't know what will work … but we know how to find out."
The sinking value of web and mobile page views — heading to an increment barely above zero — has galvanized a flight at nearly every major digital media company to a premium video strategy, and even to television itself. Many such strategies are on proud display this month at the Digital Content NewFronts presentations to the ad community in New York. But who actually knows what they are doing? Video, after all, with its story and talent focus, is not a logical extension for the tech industry. Digital businesses often have committed vast investment in new initiatives without clear models of success. But how big a leap is everybody taking here? And a leap to where, exactly?
"We recently announced a funding round to expand our storytelling to television," said Mashable CEO Pete Cashmore in a recent statement to his company after taking an investment from Turner Broadcasting and laying off a good part of his news staff. "We are now equally adept at telling stories in text and video, and those stories now live on social networks, over-the-top services and TV. Our ads live there, too, with branded content now at the center of our ad offering."
This is quite a bit of verbiage and a further contribution to the mix-up of genres, skills and distribution strategies that now confuses the discussion of what television is and what business you're going into with video. "We want to do TV, but we want to do it in a different way," said BuzzFeed's Jonah Peretti in 2015, quite as enigmatically. Discerning these strategies is the subtext of the NewFronts: "We don't know what will work," said a slide at the BuzzFeed presentation, adding with peculiar confidence, "But we know how to find out."
Vice, the magazine turned internet-video producer turned HBO star turned cable channel, arguably stands at the high point of digital video producers that have graduated to TV — yet this hardly focuses its strategy. Vice is part ad agency, part production company, part (it hopes) trusted news source, a shortform branded-content creator that has grabbed the millennial mantle. This has given it partnership opportunities with less cool video brands. At the NewFronts, it announced a deal for video with ESPN. Likewise, its cable network Viceland is a partnership with A&E. In other words, Vice's strategy is, in part, to wager other people's money — indeed, various C-suite careers at A&E are said to be riding on the Vice bet.
Dailymail.com, the hyperprolific offshoot of the British tabloid, has announced a conventional television-model strategy by teaming with Stage 29 Productions, Dr. Phil's company, for a syndicated celebrity-focused daily show set to debut in the fall. The male-focused lifestyle site Thrillist, in a recent discussion, outlined its hopes of using its brand to partner with third-party production companies and distributors. Refinery29, the fashion e-commerce and women's content site, announced at the NewFronts that it was producing 12 short films by female directors.
While potential revenue generators or marketing gambits, none of these efforts is necessarily the digital TV breakthrough that BuzzFeed's Peretti speaks of (though Peretti also has indicated that BuzzFeed might seek its own conventional TV opportunities). In this regard, much admired for its 800,000 views and much ridiculed for its ridiculousness was BuzzFeed's recent exploding watermelon production, demonstrating how many rubber bands it takes to pop a melon via Facebook Live. Indeed, Facebook, which is committing more of its future to video, has crossed a Rubicon and is now, like a traditional TV network, paying for content — including that exploding watermelon.
BuzzFeed not only is at the forefront of what might be video innovation but also of its perplexing new vocabulary, with BuzzFeed Motion Pictures president Ze Frank giving explanations at a recent digital upfront in London such as, "The movement of things in the ecosystem is so contingent on the ecosystem itself. … So we need to look at how the content is used by a person to connect with another person — identity — and we also need to think about context." What? "Everybody is finding this trend of video replacing television is absolutely enormous," echoed Jon Steinberg, formerly of BuzzFeed and Daily Mail U.S. and now developing a web channel called Cheddar, described as digital CNBC for millennials.
Of course, ad-supported digital video has been trying to break through for some time. While there is vast spending on digital video — more than $7 billion in the U.S. in 2015, according to eMarketer — little of it is the kind of high-margin TV brand advertising that producers and platforms had hoped for. YouTube, while a massive traffic draw, has been unable to compete with TV for premium advertisers and is planning a paid Netflix-like service with a "skinny bundle," though it has no agreements with content providers. Yahoo, which recruited Katie Couric and made a serious programming investment, continues to search for a viable strategy. The Huffington Post has had several high-profile video flops. And CollegeHumor and Funny or Die, two of the most successful digital video producers, seem unclear about their direction.
"People in their 20s and 30s are never going to watch television, they're never going to get cable boxes," added Steinberg, getting to the heart of the digital video hope. In this vein, The New York Times announced at the NewFronts something called Times Story, "a place and a space and a lab and a team of journalists and creators and technologies" doing things to develop "visual" journalism. Added New York Times Magazine editor Jake Silverstein, "Today we stand in front of you as the leaders in virtual reality journalism," referencing the cardboard VR glasses that the Times distributed in the fall. In addition, the Times, also treading the line in which much digital video crosses over into advertising, has a unit, T Brand Studios, employing 90 people who create branded content. Conde Nast announced at the NewFronts that it was renewing 98 of the shortform online series it had been producing (quick, name one!).
Joining this growing competition to discover a Holy Grail of digital video — amid the greatest glut of low-budget video production in history, rivaling only the greatest glut of high-budget productions — are traditional producers aiming to crack this code. Indeed, digital TV has become one of the favorite second (or third) acts of aging moguls, including Peter Chernin (assorted digital initiatives), Tom Freston (Vice, where he is an investor, board member and guiding light), Michael Eisner (Vuguru) and now Jeffrey Katzenberg (he was given AwesomenessTV as a parting gift in NBCUniversal's $3.8 billion acquisition of DreamWorks Animation).
In some sense, it might be that the strategy is merely to have a video strategy, the more obtuse perhaps the better. But in a world with no real hits (as opposed to stunts), where big-brand advertising continues to rebuff digital video, and where traditional TV success will be as elusive as it always has been, it's a strategy that may not save the day.
This story first appeared in the May 20 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.