Big tech, pandemic crush niche websites

More news and pop culture websites, aimed at younger audiences, are expected to disappear from the Australian media scene.

BuzzFeed is winding up its Australian site

More news and pop-culture websites, aimed at younger audiences, are expected to disappear from the Australian media scene following the demise of BuzzFeed’s local news site and 10 Daily.

The niche sites are struggling, amid a double-digit drop in advertising spending during the coronavirus crisis, and technology giants Google and Facebook yet to return revenue to the embattled media industry. And they face stiff competition from ABC’s lifestyle website, ABC Life, which has a team of 21 staff and $3m budget this financial year.

The bosses of well-known pop-culture and news site Junkee expect further changes across digital media this year, including consolidation and the possible retreat or major retraction of international publishers.

oOh!media chief executive Brendon Cook says Junkee boss Neil Ackland’s prediction that publishers without a “clearly differentiated proposition and audience” would come under pressure this year had proved right on the mark. “Gravity is starting to affect the big venture-backed US digital media players and they are quickly realising their significant investments in Australia are not going to deliver a return,” Mr Cook said.

“To have a fighting chance of surviving you either need huge scale or great depth of expertise around your niche audience that’s valuable to advertisers. Where you don’t want to be is somewhere in the middle.”

Rich Fogarty, founder and director of niche site Concrete Playground, also expects more carnage. “There are a number of loss-making international publishers with operations in Australia. The pandemic will likely speed up any downsizing or exit plans that were being contemplated, despite the best efforts of their talented local teams,” he said.

US-based media group BuzzFeed plans to sharpen its focus on big news stories at home following the closure of its Australian and UK news sites.

The decision to axe 10 Daily and 20 staff was part of US media giant ViacomCBS’s bid to reduce the cost of its operations in Australia through commercial television broadcaster Network 10.

US media company Vice Media, one of the early digital publishers of pop culture, recently sacked 155 staff worldwide, with boss Nancy Dubuc lashing out at tech companies. “Our digital organisation accounts for about 50 per cent of our headcount costs, but only brings in about 21 per cent of our revenue,” Ms Dubuc said in a recent note to staff.

“Publishing right now is difficult across the whole industry — plain and simple — and the pandemic has intensified the tensions we all know exist between publishing and advertising. While big tech has brought wonderful things to our lives, they are also posing a great threat to journalism.’’

Despite the US group’s rapid digital expansion, it isn’t “seeing the return from the platforms benefiting and making money from our hard work”, she said.

“Now, after many years of this, the squeeze is becoming a chokehold. Platforms are not just taking a larger slice of the pie, but almost the whole pie. And while the crescendo has been building for some time, now it is more clear than ever … 36,000+ lost jobs in journalism is enough to take your breath away.”

A local publisher, who did not want to be identified, said the rising number of newsroom closures, locally and abroad, was a major concern, particularly for young journalists.

"There was a lot of really good work being done at BuzzFeed and 10 Daily, particularly by young reporters. And I’m sure they'll find their feet, but with more and more newsrooms closing, where do they go?” the publisher said.