Is the Digital Content Bubble About to Burst? For Some of the Publishers Chasing the Broadest Scale, Maybe
Recent bad news for a number of digital-born news outlets (including BuzzFeed, HuffPost, Mashable, and Vice) is a symptom not only of the intense competition for attention and advertising online, but also of a digital content bubble where most news providers continue to operate at a loss — losses that cannot be sustained indefinitely.
So far, the largest digital-born publishers have been sustained by investors, some of whom may be losing their patience. Legacy media outlets have used their offline revenues to bankroll investments in online operations that are still often not profitable on their own. Smaller digital-born operations have started out with money from their founders or philanthropic backers, but many are struggling to break even.
More than 20 years into the rise of digital media, it seems clear that the content bubble will eventually burst unless more robust business models are found. Investors’ high hopes and dwindling legacy revenues won’t sustain digital news forever.
People continue to spend more of their time with digital media. Advertisers continue to spend more of their money on digital advertising. And yet most news sites continue to struggle to find a sustainable digital business model.