NEW YORK: The media ecosystem is increasingly fragmented with Google and Facebook taking the majority of digital ad dollars, and this will require successful media companies to develop new ways of generating revenue from many sources.
That is the opinion of Jonah Peretti, Founder and CEO of Buzzfeed, who this week sent a hard-hitting memo to staff warning that the company will have to reorganise itself to fight the “duopoly”.
“The media is in crisis. Google and Facebook are taking the vast majority of ad revenue, and paying content creators far too little for the value they deliver to users,” he wrote.
He added that this puts “high-quality creators at a financial disadvantage” and favours “publishers of cheap media”, such as the spreaders of fake news, propaganda and conspiracy theories as well as publishers of pirated videos.
He warned that the big tech platforms enable personalised “media bubbles” to form, risking the public becoming increasingly walled off from quality journalism.
“The future of democracy and culture depends on publishers and platforms working together to solve these problems,” he said.
An easy fix, Peretti said, would be for the big tech platforms to reward valuable content and, in return, Buzzfeed would “double down” on strong journalism, new formats and better content.
“In the short term, the ecosystem favors reducing content costs and a race to the bottom, but we are focused on the long term. In the long run the best content will win,” he predicted.
And in a separate development, Facebook also came in for criticism from the CEO of the New York Times Co., who accused the social media giant of not being sufficiently transparent about its activities.
Speaking to Digiday, Mark Thompson said greater clarity is needed about how much responsibility Facebook takes for the workings of its algorithm.
He noted that a phone company is not held directly responsible for the content of conversations that happen on its network, but then phone companies operate in a “transparent, regulated environment”.
“Facebook is not transparent,” he said. “We don’t understand, and there’s no requirement on Facebook to disclose, how its algorithm works.”
Sourced from Buzzfeed, Digiday; additional content by WARC staff