The spectacular rise of the online media entrepreneur » SMEInsider

The spectacular rise of the online media entrepreneur

Once dismissed as clickbaiters and cat video peddlars, a new breed of business minds are changing the media landscape forever – and they’re making a fortune doing it.

When Jonah Peretti set up online media outlet BuzzFeed in 2006, it was hard to imagine that in just eight years’ time, the news and entertainment site would be worth more than the Washington Post. But, whereas the 137-year-old newspaper that broke the Watergate scandal was sold to Amazon founder Jeff Bezos for $250m last year, BuzzFeed was recently valued at $850m and has just scooped a further $30m in funding from US venture capitalist firm Andreessen Horowitz.

So, how did this happen? According to Chris Dixon, an early investor in BuzzFeed, these new media outlets thrive because they are designed, not adapted, specifically for the smartphone generation. “BuzzFeed has technology at its core,” he says. “Everything is built for mobile devices from the outset. Internet native formats like lists, tweets, pins, animated GIFs, etc. are treated as equals to older formats like photos, videos, and long form essays. BuzzFeed takes the internet and computer science seriously.”

In focussing its attention on maximising the potential of the internet and developing content that really works on this platform, Buzzfeed has captured a young, connected audience that other media companies can only dream of. 75% of its traffic comes from social media channels and writers are rewarded based on the number of times their content is shared, rather than the traffic it generates, making it a highly attractive destination for advertisers chasing engaged eyeballs.

Douglas McCabe, a media analyst at Enders Analysis, told the Guardian that many media companies are “already concerned” at the company’s knack for sucking people in with lists and, yes, cats before seamlessly shifting them onto serious political news. “BuzzFeed traffic has grown enormously – it is growing at a rate of 75% year on year and is reaching 30% of the internet audience in the US,” he said. “There was a period when traditional businesses wrote [internet media companies] off as irrelevant, but then they didn’t go away, and it took off. Now they really want to know what it is going on here and understand it.”

And BuzzFeed is not alone. Over at Contently in New York, a team of journalists and technophiles have been disrupting the way that traditional media providers source their content since 2010, with impressive results. Having set up the company as an alternative to online “content farms” that flood the internet with low quality, syndicated articles that, they feel, devalue journalism and turn off readers, the Contently team links up magazines, newspapers and brands with the people making the content they need, drawn from a formidable network of 40,000 journalists, infographic designers, video producers and photographers. The company even funds investigative journalism projects that are increasingly out of the budgetary reach of traditional newspapers.

Upworthy, another runaway media success, states its goal as curating and promoting the web’s more meaningful content, and focusses its efforts on finding content that really works online, writing compelling headlines and encouraging people to share it via social media. In its third month of operation, the company succeeded in attracting 2.5 million unique monthly visitors and, by December last year, that figure hit 87 million.

People in the media business often think they have to choose between mass appeal and substance,” said Upworthy backer and Facebook co-founder Chris Hughes in an email to the New York Times. “What I love about Upworthy — and what excites me about the significant traction they’re getting — is the plan to do both at the same time.”

Media outlets that are clinging to their traditionalist snobberies should take note, because sites like BuzzFeed and UpWorthy are going nowhere. “We’re presently in the midst of a major technological shift in which, increasingly, news and entertainment are being distributed on social networks and consumed on mobile devices,” says Dixon. “I believe the future of BuzzFeed – and the media industry more generally – will only get brighter as the number of people with internet-connected smartphones grows, and the internet solidifies its place as the central communication medium of our time.”

We believe BuzzFeed will emerge from this period as a preeminent media company,” he said.