Consolidation in the digital-media sector is looming as an inevitable outcome — and BuzzFeed CEO Jonah Peretti said he’s interested in joining forces with other companies through potential mergers and acquisitions.
Peretti’s theory is that if BuzzFeed were combined with other media companies, the new entity would be able to get better economic terms for advertising from internet giants Facebook and Google, he said in an interview with the New York Times published Monday.
“If BuzzFeed and five of the other biggest companies were combined into a bigger digital media company, you would probably be able to get paid more money,” he said.
Peretti cited four BuzzFeed competitors, saying, “You have Vice and Vox Media and Group Nine and Refinery. There’s tons of them that are doing interesting work.”
Peretti declined to identify which companies BuzzFeed has approached about a possible merger. A BuzzFeed rep did not respond to a request for comment.
Asked in an interview with Variety in June 2017 about the possibility of selling BuzzFeed, Peretti responded, “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.”
BuzzFeed — along with other companies in the space reliant on internet ad revenue — have been struggling with stagnating or declining sales over the last two years. BuzzFeed laid off about 100 employees a year ago, and has subsequently made additional cuts including shutting down its podcast team. Meanwhile, other companies are going belly-up: Earlier this month, without warning, Defy Media shuttered operations, leaving the YouTube-centric company’s creator partners in the lurch.
According to the Times, preliminary M&A talks among “a few” digital media companies — including BuzzFeed — have taken place to date.
BuzzFeed is on track to generate over $300 million in revenue for 2018, up from $260 million last year (when the company missed its target of $350 million), the Times reported, citing anonymous sources.
On Monday, in another attempt to build a new revenue stream, BuzzFeed News launched a recurring membership program, which it said is a new way for readers to support the website but not a prelude to a paywall business model.
Under the new program, for $5 per month, “readers can support our journalism and receive exclusive emails” about major stories, new projects, and behind-the-scenes looks at the reporting behind the stories, BuzzFeed said. For $100 per year up-front, members also will receive a limited-edition BuzzFeed News tote bag, with additional merch to be introduced in the future. The monthly contribution plan will be available worldwide. More info is available at support.buzzfeednews.com.