The hollowing out of Vice and BuzzFeed marks the end of the digital media revolution

Analysis by Oliver Darcy, CNN

New York (CNN) — Editor’s Note: A version of this article first appeared in the “Reliable Sources” newsletter. Sign up for the daily digest chronicling the evolving media landscape here.

The digital media revolution is over.

Its two leaders, Vice Media and BuzzFeed , are in a frenetic retreat, surrendering much of their online empires as they try to protect what remains of their core assets. Having once threatened to upend the entire industry and usher in a new era of news distribution and monetization, the former digital media darlings are now merely attempting to survive in any form they can.

As they retreat, their large newsrooms once filled with rows of journalists are now shutting off the lights and closing their doors. BuzzFeed, already slimmed down after several waves of layoffs, announced this week that it will slash another 16% of its staff as it undergoes “planned strategic restructuring” to reduce costs. And Vice Media said Thursday that it will lay off hundreds of staffers as it ceases publishing on its own website and pivots into a business that resembles a studio.

“It’s devastating to have a group of reporters who have made such a significant impact in the world have their jobs end in this way,” one senior Vice Media staffer told me about the ugly state of affairs.

All digital publishers have struggled in recent years as they navigate brutal industry headwinds, brought on by a softened advertising market now dominated by Big Tech titans and plummeting referral traffic. Not to mention, the looming threat of artificial intelligence, also brought on by Big Tech titans.

Both Vice Media and BuzzFeed have been avatars for the entire industry, having served as the two highest-profile pioneers that paved the (short) road for other digital-first upstarts. At one point, the outlets inspired fear in their legacy media competitors, with each valued at billions of dollars while making splashy hires and threatening further disruption.

Now they’re struggling to keep their head above water.

The demise of Vice Media as we know it is a particularly hard pill to swallow. Staffers at the outlet, who I’m told will receive severance if they fall under the knife, caught wind that something was awry many hours before chief executive Bruce Dixon delivered his memo. Ahead of the announcement, the mood inside Vice Media was grim.

Staffers struggled to work amid rumors circulating about the outlet’s fate, with one staffer telling me that it was like watching “the violinists playing aboard the sinking Titanic.”

Then, late in the 3pm ET hour, The NYT’s Benjamin Mullin confirmed their worst fears, reporting that mass layoffs were en route. Finally, at around 5pm ET, Dixon officially informed his workforce of the excruciating decision and drastic changes that the company would implement under its new private equity owners, led by Fortress Investment Group.

Dixon said in his note that Vice Media had determined it was “no longer cost-effective” for the company to distribute its digital content on its own. Instead, he said, it will “look to partner with established media companies to distribute our digital content, including news, on their global platforms, as we fully transition to a studio model.” No word on who those partners might be.

The company also has to determine what to do with Refinery29 and Motherboard. Dixon said that Vice Media is in “advanced talks” to sell the former. And I’m told a number of discussions are underway about what to do with Motherboard, with one possibility being to license the tech-focused vertical to another company that would operate it, a la the Sports Illustrated model.

From what I gleaned Thursday, executive are not certain whether the content the site has published through the years will remain online.

Meanwhile, the hundreds of staffers left wondering their fate will have to suffer through the weekend to learn whether they are out of a job. A cruel move, to say the least. Regardless, staffers on the digital publishing side have largely already accepted their fate.

“I think most of us have seen the writing on the wall: there are simply not enough lifeboats, and highly unlikely that the skeleton crew of us on digital news will be invited onboard one,” the employee, who likened Vice Media to the sinking Titanic, told me.

In the wake of the mass layoffs, it’s hard to imagine the brand will be the same. They never are. The internet is littered with zombie publications, carrying familiar names but lacking the souls they once had, transformed into mere shells of their once vibrant selves.

Strikingly, as the Vice Media staff received the devastating news Thursday, co-founder Shane Smith, whose salesman-like bravado made him more than $100 million from the outlet, was nowhere to be found.

The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.