At SXSW, Digital Media Bosses Exude Confidence in Their Challenged Businesses

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Vox Media CEO Jim Bankoff

Vox Media CEO Jim Bankoff and BuzzFeed CEO Jonah Peretti used appearances to lay out a path forward for the brands they founded and lead.

The annual SXSW conference is not a place for cynicism. But, amid recent headlines about scores of layoffs across their corner of the industry, the leaders of Vox Media and BuzzFeed used their appearances this year to make a pitch for the strength of the digital media business and their company's position.

"Believe it or not, I'm extraordinarily optimistic," Vox Media CEO Jim Bankoff said Saturday. "CEOs shouldn't be CEOs if they don't believe that."

But he did make clear that the business landscape is challenging. "I'm optimistic," he said. "Now, I'm also realistic."

Bankoff's Vox Media was forced to lay off 5 percent of its employees in February 2018, a round of cost-cutting that was dwarfed by BuzzFeed's decision to cut 15 percent of its staff in January of this year in an effort to put the company on a faster and more realistic path to probability.

On Saturday, Bankoff said that people in the industry should be cautious not to conclude that media layoffs spell doom for the industry, citing recent cuts at legacy giants like Disney and 21st Century Fox. "It's an industry in dramatic and painful disruption," he said. "But it's a disruptive time, and born of that disruption are new ways of doing business and new opportunities to tell stories in beautiful new ways."

BuzzFeed CEO Jonah Peretti made a similar point during his keynote address on Friday morning. "There is a lot of skepticism right now in the market for digital media," he said. "A few years ago, there was a lot of exuberance, and people were maybe overly optimistic about digital media. Now, they're maybe overly pessimistic about it. ... There is a really strong future for digital media."

Ahead of his speech, Peretti laid out "The Path Forward for the Internet and BuzzFeed" in a lengthy memo that included some tangible financial details.

"In 2018 and 2019, we will generate over $200M in revenue from business lines that didn’t even exist in 2017," he wrote. 

Peretti, in his memo and during his speech, talked about the importance of forging more remunerative publishing relationships with the big platforms. "We are making real progress here, and so are other digital publishers," he said. "A year ago, in Q1 of 2018, we made about $500K in video platform revenue from Facebook; in Q4 of 2018, we made $3M."

The exec also addressed recent rounds of industry cost-cutting in his memo. "The intervening year has been a challenging one for publishers, with thousands of talented people losing their jobs across traditional and digital media," Peretti wrote. "To navigate this crisis, our team has done inspired, tireless work to diversify our business. We made painful decisions to reduce staff, too. The coming year won’t be a cake walk, but I see a clear path to a bright future for BuzzFeed. I’m hopeful the same is true for many of our peers."

During the Q&A portion of the event, Peretti was asked to defend his optimism in the industry in light of his company's layoffs, which included about 45 journalists. "Is your optimism justified?" one attendee asked.

The exec said his optimism is "warranted" and described how his company's strategy has changed. In the old days of digital media, "people were focused on growth and trying to get as big as possible." He added, "Now, I think people are focused on running like real businesses and being profitable and focusing on long-term sustainability. BuzzFeed has gone through that transition, and a lot of other media companies are going through that transition."

Bankoff also made some news on Saturday, revealing that Vox Media will be introducing membership models "later this year" and will also be experimenting with paywalls at some point. Peretti also addressed the possibility of a BuzzFeed paywall, saying that "subscription isn't something we'd do with our entire company," though it could entail a product or feature.