Two of the media world’s most famous Kens — Ken Lerer (founder of HuffPo and NowThis News, and chair at Buzzfeed) and Ken Auletta (New Yorker journalist) — had a public chat this past Tuesday, September 13 at the CUNY Graduate School of Journalism. The topic? The business of journalism.
Before I get to my notes, let me note that it was a well-attended event, with many media heavyweights present, including Margaret Sullivan (NYT), Ben Smith (Buzzfeed), and Brian Stelter (CNN) — who published his own recap in the September 14 edition of his “Reliable Sources” newsletter:
Ken Lerer unplugged
BuzzFeed chairman Ken Lerer was interviewed on stage by Ken Auletta at CUNY tonight. Margaret Sullivan and Andrew Heyward sat up front. I tried to slip in unnoticed, but Ben Smith spotted me. Some highlights:
— On Univision’s acquisition of Gawker: “I don’t get it…”
— On Univision more broadly: “A really good, interesting company. I don’t really understand their digital strategy. Seems a little random to me…”
— On Tronc: “I’m really confused about them. I haven’t a clue…”
— On Trump: “I think the press” (he singled out CNN) “gave him a pass like I’ve never seen in politics in my lifetime and probably never will see again…”
— On Facebook‘s power: It’s impossible to launch a new media company today “without launching it on top of Facebook. It’s just not possible.” There’s “no reason to fight it, ‘cuz it’s there, you might as well just go with it…”
— On the concerns about BuzzFeed backing away from news: “That is utterly absurd and ridiculous.” The recent reorg will “allow us to go into news even deeper because it’s a special unit…”
— On the recent speculation about a tie-up between BuzzFeed and Viacom, which just added Lerer as a board member: “No.” He said this NYPost story was “just made up…”
— BTW, Lerer attended his first Viacom board meeting today. He was the only male board member without a tie on. “I was so embarrassed…”
As you can see, they covered a lot of ground, thanks to Lerer and Auletta’s often-jocular and -debating rapport, as well as pointed and thoughtful questions from CUNYJ students, CUNYJ Dean Sarah Bartlett, and other journalists.
Here’s the extended recap, aka my full notes:
Revenue for digital media:
- licensing your IP (intellectual property) (soon, he forsees)
- contextual commerce
Traffic leads advertising by years, sometimes decades. Then advertisers finally figure out to follow the eyeballs.
I’m not concerned about revenue supporting digital content companies.
You just can’t be too early or too late.
We’re already seeing the pendulum swing from broadcast to digital.
If you’re the CEO of a traditional media company, whether video or non-video, you have to learn to fix the plane while you’re flying it. It’s easier to land the plane, fix it, then take off again. Traditional media doesn’t have that luxury. Have to maintain while leading into new, growing business. How long can you go for digital before traditional gets run into the ground?
Ads are changing, too, becoming part of the product, although still needs to be said they’re ads.
Display ads vs Native ads.
Think there will be a lot of consolidation of digital companies before more innovation occurs.
The younger generation is all streaming, can’t monetize that now, but will be monetized in the future.
- we launched it too early
- third time, I got it right mostly for two reasons: (1) the world caught up to what we were trying to do with video, and (2) I finally said to a 27yo young woman she needed to be the editor. Now the newsroom is filled with people who are producing the news for themselves rather than people producing news for a demo.
- to be a good digital video editor, you HAVE to have people producing and editing it for themselves.
- we had three people who never worked in media before and are doing a fantastic job
The video world is being disrupted like how the non-video world was being disrupted 10 years ago.
NowThis is now second to Buzzfeed, top producer of election coverage in the country, advertisers are lined up through the door.
Average length is longer than wanted. Initially said 15 seconds at launch, team laughed at me and produced 4 minute videos. Over the years it’s become a compromise of 45 second average.
Now we have a pretty strong ONO.
100% mobile reliance
Presumption is just like print: people who produce terrific news for TV can’t produce on mobile because it’s a different mindset, demo and expertise.
Until a place like CBS News sets up a shop with CUNYJ grads to man the news department, it’s never going to work.
Technology and distribution demands a different kind of content.
Re. Longform on digital
- Can’t give timeline, but as mobile spreads, everything will go there.
Not an issue of substance, but of form.
- news side focused on aggregation at first
- blog side focused on unpaid writers
- then we hired editorial staff who wrote pieces from scratch and were paid
- splitting into Business and Entertainment makes sense because it’s grown so big
- will be more efficient
- will allow us to go deeper into news, not less of it
- we would like to build video in the news unit, but it’s at its infancy now. In a couple of years, it’ll be big. Right now, around 95% of the video is entertainment.
- we’ll build up the news video in a similar way that we did NowThis News, but however Ben Smith takes it.
- as for hiring, we were on a tear last year, but now we have a good base of employees, so [growth] would be moving people around, not hiring more
Facebook is a media company. Companies have to go along right now because of their “bear hug” on the market. You can’t launch a content company now without being on Facebook. You need them to spread your content. Right now they have immense power in the marketplace. NO reason to fight it because it’s there, might as well just go with it.
Snapchat will have as big a share eventually. Much like Google and Amazon.
Q: Potential competition between Buzzfeed and Viacom?
Cable industry – analog video
How many more years until it drops?
Cable subs are propping it up right now.
Entertainment side of video will prosper in Los Angeles, but LA won’t ever reach NYC levels of media presence.
When launching a company:
- Coordinate, but don’t suffocate.
Vice is very good at licensing their intellectual property.
Buzzfeed and other content companies should lean into that, licensing to mobile carriers, cable TV, internationally to third parties, other media companies in Europe, China, Asia. . . it should be a real revenue stream in 2-3 years.
Re. Univision, I’m sure they have a strategy, but I don’t know what it is and don’t understand what they’re doing with Gawker and Fusion.
Q: what about local and niche markets dominated by larger companies?
A: need a content strategy and business model, created across social feeds. Need a website. Need enough money to get you through the years where you’re building a brand and not monetizing. For example, TheDodo.com (founded by Lerer’s daughter) went from 7M to 70M video views a month. Not expensive to run. Do it like them.
Q: how do you guard against a saturation of videos?
A: Video views only go so far. You need to create content that resonates, not for the sake of creating content. Be smart about how many you produce, why you’re producing them, keeping quality up, and managing how many go up on social per day.
Q: advice for students positioning themselves for the next wave?
A: VR is hard to invest in because it’s too early. But universities can go all in on future tech (like VR and 360) in a way that investors can’t.
Re. jobs, quality video producers and editors are needed and being hired.
Jschools shouldn’t teach branded content because they’re schools of journalism, not schools of advertising.
That said, studios being created inside media companies need to be separated from the editorial body, but the skill set is very similar.
Q: podcasting and audio? What is the next step here?
A: Lerer loves the concept, listens to 1-2 podcasts, but advertising is not there yet and will take a long while before it catches up.
Q: role of new media in politics?
A: the news cycle doesn’t exist anymore, which changes politics “enormously.” Now, it’s “literally insane,” stories popping up and disappearing/being crowded out. It’s minute-to-minute.
Lerer thinks paid media is as important as it’s always been. Yet to be seen whether Trump being outspent by Clinton will impact anything, since he’s managed to manipulate U.S. media. It’s not an unfair knock on CNN that at one point in the primaries, they went all in on Trump and helped him. It may have been a programming strategy, but the press gave him a pass that is unprecedented, then it evened out. . . There’s been a lot of manipulation that’s been unhealthy.
Q: do you fact-check as interviewer? Or take Chris Wallace’s stance that it’s not his job to factcheck?
A: That stance is absurd. That’s not even a question.
Q: repercussions of a wealthy person financing takedown of a media company?
A: big question, I don’t have a good answer. On the one hand, it’s a business to support lawsuits. I don’t think it’s necessarily an evil or a bad thing. I’ve never done it and wouldn’t do it, but it’s business. I think Thiel was wrong in the facts and saw an opportunity to close these guys down. At the end of the day, what he did isn’t something I might do, but I don’t have a problem with it. But it is a slippery slope.
Q: there’s a tremendous amount of handwringing about the state of journalism, and yet when I listen to you, you’re very optimistic about employment prospects and profitability of digital video companies. I’m trying to square those two views of the world.
A: Lerer only has an optimistic view of this world. He remembers when MTV started, people lamented the end of civilization and youth. It gets said now, too. But give me a break. It’s a great time for journalism. It’s a transition time, giving some people anxiety, but live with it. He thinks journalism is alive and well and flourishing. Lots of opportunity for jobs, but may be different types of jobs.