Jonah Peretti launched BuzzFeed in 2006, after co-founding the Huffington Post a year earlier, as a proof-of-concept for how to create and track viral content. He’s now sitting atop a digital media empire that emerged from those viral, data-centric roots — and NBCUniversal, looking for the magic to rub off, has plowed $400 million into BuzzFeed. At this stage, the company may be on the cusp of going public, a rare (and potentially risky) move in the digital-media space. Variety sat down last week to talk with Peretti at BuzzFeed’s NYC headquarters about what’s next as part of a cover story on the company. An edited transcript:
Is BuzzFeed planning an IPO?
It’s one possible path for us. We certainly wouldn’t IPO until we feel we’re ready to IPO. The goal is to build a company for the long term, and build a strong, independent company. And one natural path would be to IPO. But we’re not under any pressure to IPO.
Somebody told me you don’t want to sell the company. Is selling BuzzFeed something you’ve ruled out?
I know that there’s a lot of focus on things like IPOs or potential transactions. The thing I try to stay focused on is the work itself. And independence is one value that has allowed us to do things that other companies haven’t been able to do.
You talk about BuzzFeed as a technology-driven company. But at the end of the day, it’s an ad-supported media business, right?
I would say we are a hybrid. We do make content. We employ journalists. We employ video producers. But we give the content creators data and a connection with an audience that you don’t get in traditional media. The main way we’re a tech company is, we’re taking all that data and feedback we get from the hundreds of millions of people consuming our content and we’re learning from it.
But as it relates to communicating to Wall Street — to a financial audience — are you a technology company that happens to create content? Are you comparing yourself to Facebook or Google?
I think it would be pretty arrogant to compare ourselves to Facebook or Google… They have orders of magnitude more revenue than us. But when you look the big media companies, it doesn’t really make sense to say we’re like Time Warner.
In the early days of cable, people would said, “People are going to watch CNN? On cable?”… You’ll be able to build something that will eventually look to Wall Street as, “Oh, this is inevitably how media will go. It’s going to be on social and mobile platforms. It’s going to be global. It’s going to be more engaged with the audience and data-driven.” But it will take time for the market to develop, for people to see that and understand that.
Does NBCUniversal have a say in what BuzzFeed does next?
They don’t have any control over decisions that we have… We have a partnership with them, and we do a lot of things with them. But they don’t have a controlling investment. They don’t have an option to buy us.
The reason we wanted them to invest instead of a straight financial investor is, now we have Tasty [BuzzFeed’s food and recipe brand] on the “Today” show, and we did the official Olympics Snapchat channel with them. BuzzFeed’s doing well, but we can’t afford billions in Olympics rights. And NBC is doing well, but they don’t necessarily have some of the expertise we have in how to make great content for Snapchat. So we can work together and create things we that wouldn’t have been able to do on our own.
Why not use the NBCU tie to do a full TV network, like Viceland? Is that something you have considered or would consider?
It’s definitely something we’ve been pitched by various parties. I don’t think NBC has actually pitched us that, but that’s partly because we talk about the things we are both interested in. And one of the things I think is important is, you do what you’re good at doing, and not try to jump over and do things that other people are good at doing that you don’t have much experience in.
We’re not experts in making traditional television. I don’t watch much television. The cable networks, particularly secondary and tertiary cable networks, are having trouble right now. So the idea of jumping into cable to me seems like it’s moving away from our core skills, which are based on digital and reaching large audiences with ad-supported digital media.
But you’re trying to become part of the TV ecosystem, right?
Generally I see it as, we’re partnering. We’re partnering with Oxygen to do a true-crime story based on our reporting… We have stories that people will discover online and share and have a big impact. But when it comes to making a TV show, we don’t say, “Hey let’s get our group together of people who work at BuzzFeed together and make a TV show,” we partner with a network or a production company.
Video has been a massive growth story for BuzzFeed. But will revenue from ad revenue be enough to drive the company’s growth? There’s so much content and competition. Will you hit a ceiling in how monetizable this is?
Overall, the market is growing. The amount of revenue going to digital keeps going up. The amount going to branded content keeps going up. So then the question is, If it’s not scarcity of inventory, what is it that gives you an advantage? It might be that you’re better at attracting attention, targeting different groups, you have a brand and built-in distribution. We can deliver a larger cross-platform network really than any other company. So we have scale, and then we have knowledge of what works on Snapchat as opposed to YouTube as opposed to the web. You could go directly to Facebook, or a platform, but you still need to make good content.
What works on social platforms is short-form content. Is there a missed opportunity for BuzzFeed in longer-form storytelling?
I think we’re going to see the market bifurcate into two buckets. One will be best represented by Netflix and HBO, and that will be subscription-based revenue models, with no advertising and premium, expensive, high-cost-per-minute content. Think “Game of Thrones” or “House of Cards” type stuff.
There will be another bucket dominated by Facebook and YouTube, and a few others — we’ll see who ends up on the traditional media side being able to step into that space — that will be ad-supported media and kind of replace what broadcast TV used to be. So, massive reach. No affiliate fees. Advertising supported. And it will be lower cost per minute, but it will become more premium.
So the traditional entertainment space — how interesting is that for? Could it be a lucrative area?
I think it could be lucrative. But it’s an area where we’re partnering. It’s not our core business, but it’s an area where we can generate additional revenue.
What do you make of the “Why I Left BuzzFeed” video phenomenon?
One of the most-searched terms on YouTube is the word “BuzzFeed.” So there is distribution for things that are tied to BuzzFeed and the brand. I think people who are media creators from this generation feel like they want to tell a story about things that’s important to their life.
But some of these people have said they left because the company told them they’re replaceable and that there’s never going to be “BuzzFeed star.”
I hope that no one was ever told that they were replaceable. And we want to make BuzzFeed a place that creators want to come and work. And we have a lot of people who are really excited to work here, and a lot of people who are happy working here. I think that in some cases there’s people who may have had a bad experience. If that’s the case, then that’s an area where we should work on doing better.
And there are some cases, and you’ll see this in some of the videos, where it’s just a difference in career goals. If you want to be a “YouTube star,” who talks direct-to-camera and is what’s called an “influencer.” That’s not what BuzzFeed does. If your interest is talking directly to your fans like an influencer, then that could be frustrating that your job doesn’t match what your career aspirations are.
You also have a program now where you’re doing revenue-sharing deals with certain top creators.
We have this Development Partners programs. We did it really as a test. And I think the next stage is to think how we evolve that program. We were probably a little too slow evolving it for some of the people who wanted to be the next Development Partner and didn’t get a chance to do that. Basically, the idea was, Can we work on having a more transformative impact partnering with people to make things?
Are you, as the founder, the right person to run a public company?
Recently, I would say, the conventional wisdom has become that founding CEOs can learn what they need to be public company CEOs. But it’s harder for professional CEOs to learn the cultural and entrepreneurial instincts of a founder. Maybe 15 years ago, that was reversed. The Google founders had to bring in Eric Schmidt. Now with Mark Zuckerberg, and Larry Page taking over Google, it’s, “Oh, it’s better to have a founder CEO who can learn.”