Study Hall Digest 2/4/2019

By Study Hall staff writer Allegra Hobbs (@allegraehobbs)

Media Hell Week Becomes Media Hell Month

The week before last, an astonishing sweep of layoffs hit newsrooms across the country. The casualties were mostly in the digital sphere, with 250 jobs lost at BuzzFeed and a staggering 800 jobs lost at Verizon (which owns the Huffington Post, AOL and Yahoo). Newspaper chain Gannett, which owns local papers across the country, suffered the loss of around 400 jobs.

On Friday, Vice Media CEO Nancy Dubuc announced the company would also axe 10% of its workforce, totaling around 250 jobs. That brings the total number of lost media jobs in the past two weeks up to around 2,100. Here’s a rundown of the Vice situation. Prepare to be not even remotely shocked as some trends from the previous hell week are repeated in the current hell week (we’re going to have to start naming the hell weeks).

• I think now is a good time to return to this Intelligencer piece on the origins of Vice. Founder Shane Smith, who is a billionaire, built the company on a bluff with the intention of bouncing before it blew up in his face. He siphoned tons of money from rich people by lying about the potential of the aggressively edgy publication and its appeal to millennials. It worked a little too well. Smith attracted investors at higher and higher rates, raking in hundreds of millions in VC money and bringing the company’s valuation into the billions. (One anonymous staffer quoted in the story recalled hearing of a $250 million investment from a venture-capitalist firm and wondering why they were still making a measly $32,000.)
• Smith used that money to grow as fast as possible. He opened offices in nearly 40 countries and pushed the company into new markets, even launching a cable channel, Viceland, despite the fact that cable television is on a decline. The company ended up with around 2,500 employees total.
• Smith also used that money to enrich himself. At the height of Vice hype in 2015, he spent $23 million on a Santa Monica mansion that had appeared in Entourage. It was reported in the summer of 2017 (months before he would cede the reins to Dubuc following a New York Times piece on sexual harassment and misconduct at the company) that he had become a billionaire.
• Vice raked between $600 and $650 million in revenue in 2018. It’s not enough! In fact, that’s more than $100 million below a projection the company gave one investor, private-equity firm TPG. Vice has absorbed over a billion in investments from Fox, and Disney, and TPG — bringing its valuation to $5.7 billion — and now it can’t deliver the expected returns. Once again, media companies cannot scale at VC levels. But why would Shane Smith – who is a billionaire living in a $23 million mansion — give a shit?

Essentially, Vice is like an exaggerated caricature of the new media company in crisis. It has everything — a greedy, egomaniacal founder, epic amounts of funding from wealthy investors who think digital media companies are equivalent to fast-growing tech companies, and a difficult path to any kind of stability when the industry is still in upheaval.

So what now? Dubuc’s goal is to make Vice profitable. She plans to do that by cutting costs, which means firing hundreds of workers, and investing more in areas she sees as opportunities for growth — film, television and branded content (similar to what post-layoffs BuzzFeed will be focusing on). Editorial workers who have done invaluable work, who built Vice into the internationally recognized brand that it is, get ditched in the process.

Today in ORGANIZING WORKS: Out Freelancers Fight for Pay

Dozens of freelancers for LGBTQ publication Out, which recently re-launched under Teen Vogue wunderkind Phillip Picardi, have banded together to demand long overdue pay from parent company Pride Media. The workers are caught in the midst of a bizarre finger-pointing battle between Pride and outsourcing firms Grand Editorial and McCarthy LLC, with which it had a production deal. McCarthy says Pride owes it money, Pride says it stopped paying McCarthy because McCarthy wasn’t paying contributors — idk, it seems like who paid who in this case should be a matter of fact easily settled by a look at financial records, but in any case, the end result is contributors are owed hundreds of thousands of dollars.

Over 50 unpaid freelancers have now banded together to collectively demand payment. They held a meeting on Friday that included a call with the National Writers Union, said one freelancer who attended, and plan to release a joint letter soon. “The idea is strength in numbers, and already we saw some movement by going public, so the idea is to continue that,” Adam Groffman, a writer who began working for Out over the summer, told Study Hall.

Groffman had been owed around $9,000. In November, only when he’d threatened to file a complaint with New York City’s Department of Consumer Affairs under the Freelance Isn’t Free Act, Pride paid him $5,000. He is still owed the rest, and he did ultimately file a complaint with the city DCA, though he says he received an email from Pride pledging the remaining money shortly after going public with his complaints on Twitter.

Groffman says he was never contracted through Grand, McCarthy or any other third party. His contract is with Pride Media.

These issues are coming to light weeks after Grindr shut down its editorial arm INTO, scorching an entire LGBTQ newsroom in a disingneuous “pivot to video” (the video department was also fired). It raises concerns about whether LGBTQ media is being appropriately valued — Groffman wondered whether the perception of LGBTQ issues as “niche” created financial strife for the publications.

“I feel the LGBT media industry has always been slightly at a disadvantage because it’s a smaller market,” he said. “But I want them to exist…It’s very hard because I want to like these publications, but my experience with them as a writer has always been they’re low-paying, and it’s harder to get stories out. There are more challenges in LGBT media.”

Back to BuzzFeed: In the wake of the bloodbath, the company is preparing for a restructuring in its quest to become profitable. Previously distinct teams are being consolidated into one big Content Group. Its Studio division will now focus solely on creating and selling shows to other platforms rather than productions for BuzzFeed.

The OTHER THING it’s doing, unsurprisingly, is focusing more on free or underpaid content instead of staff employees. BuzzFeed is expanding its editorial fellowship from three to twelve months and is hiring up to a dozen fellows. It will also rely more on unpaid contributors, including community quiz makers like this teen, Rachel McMahon, who has authored over 700 quizzes and last year was the fifth-highest traffic driver for the site, with over 130 million views.

Staffers had pushed her to create more content, she told the New Yorker, and had sent her notes of encouragement and swag, but she was never paid. In fact, the story only came to light after BuzzFeed also fired its quiz director.

Video social-network TikTok has become wildly successful by creating a home for weird memes — like eating fingers to Evanescence’s “Bring me to Life,” which Amy Lee herself partook in! The app, which has up to 500 million monthly active users and has already been testing ads in the US and UK, recently sent a pitch deck to a big advertising company in Europe. It’s unsurprising the company would begin exploring monetization options, given its growing popularity and the impetus to compete with social networks like Instagram, which has a popular video feature and is growing rapidly and has claimed a whopping 1 billion active monthly users. And advertisers would naturally want in, given the app’s appeal to young consumers. Will we also see the rise of TikTok “influencers” who partner with brands, or is the platform too entrenched in weirdness? Some brands have already dabbled in influencer campaigns, so seems likely! (Bonus: TikTok is not owned by Facebook).

SHORT LINKS:

• The Washington Post paid upwards of $10 million for an inspiring minute-long ad during the Super Bowl, which is certainly a wild way to ostentatiously throw cash around at a time when journalists are being fired en masse and labor conditions in the industry are NOT GREAT. A Post staffer and union leader called the ad “infuriating,” citing management’s decision to move workers to riskier health insurance and refusal to add any time onto the existing four weeks of paid parental leave. Really inspiring stuff!!
• The Outline founder Josh Topolsky, rumor has it, met recently with top Mashable executives. It’s no secret the Outline is not in a great financial situation (though you wouldn’t know it from news of its forthcoming tech news site), so it looks like an attempt at fresh revenue: licensing their custom CMS or setting up an ad partnership.
• Spotify is preparing to shell out more than $200 million for the audio startup Gimlet Media in its quest to move into producing original podcasts. The podcasting boom continues!! Gimlet currently makes most of its revenue from Hollywood IP deals and producing branded projects; it’ll be interesting to see how that meshes with Spotify’s subscription model.
• The Seattle Times is a rare bright (or at least bright-ish) spot in the newspaper industry: they have 41,000 digital subscribers, up 21 percent since last year. And turning away from the clickbait model to a subscriber-focused model has allowed them to produce better journalism. The future! We hope.
• Today in dystopia: New York life insurers could monitor your social media to determine your rates, leading the Wall Street Journal to publish handy tips for Instagram users such as: “Don’t post photos of yourself smoking on social-media sites” and “Do post photos of yourself running,” though “Riskier sports, like skydiving, could complicate the situation.” I’ve seen more than one person riding a bike while smoking here in New York so would that be good or bad??