Here's something Jonah Peretti doesn't want you to share: BuzzFeed's new, exploitive content strategy.
BuzzFeed founder Jonah Peretti has a new idea to make money. The website has quickly grown into one of the biggest in the world, reaching 85 million unique users in August, with a surreal mix of .gif-driven lists, investigative reporting, advertiser-sponsored stories, and an open-ended platform for users to make their own versions of any of the above.
Like many media companies trying to support themselves through ads, Buzzfeed's massive readership has so far produced meager revenues. In 2012 the site reached an average of 40 million people per month and made $20 million from selling their attention spans, and this year's revenues are estimated to be between $40 and $60 million on double 2012's monthly readership.
The company's profitability depends on scale more than anything. It needs a massive reach in order to sell a not especially valuable asset, the market rates for which are dubious and volatile. Increasingly this means making things for non-English speakers. To wit, the company has announced a partnership with Duolingo, a web app that uses gameplay theories to help teach its users foreign languages.
In many cases you can learn more about a company by looking at the expenses they're willing to pay than by looking at the thing they claim to be selling. In assigning its translation work to unpaid students, BuzzFeed is acknowledging how little value there is in its content.
Duolingo is free to students and has no advertising. Instead, the company sells their homework to media company's as a kind of crowd-sourced translation project. Companies like BuzzFeed supply their articles to DuoLingo, which in turn assigns those articles to their students to translate as part of a lesson plan. The students' work is then collated, proofed, and then sent back to BuzzFeed for publication.
The arrangement offers benefits to all sides, but those benefits are of such disparate values that it's impossible to see the system as anything but exploitive. In many cases you can learn more about a company by looking at the expenses they're willing to pay than by looking at the thing they claim to be selling. In assigning its translation work to unpaid students, BuzzFeed is acknowledging how little value there is in its content.
But BuzzFeed doesn't ultimately sell content, it sells growth. Content is a widget within its growth machine, but the content is not the point anymore than the microprocessor is the point of having an iPad. Speaking at South by Southwest this year, Peretti admitted that "quality is not all that matters." More important than the quality of the good is the size of the network through which it's distributed. "When you look at the performance metrics, there was one Mormon for every ten Jews in 1950," Peretti went on, making a horrificly honest analogy for the company's ethos, "and now there are more Mormons in the world than Jews. Mormons know that it's not enough to practice your religion; you also have to spread your religion."
BuzzFeed's religion then is a system for asymmetric compensation. The company's main offering to its advertiser clients is the unpaid labor of its readers. "Advertising on BuzzFeed gives you access to an audience of SuperSharing users," their advertiser page promises, claiming that 75 percent of its readers visit the site specifically looking for content to share through a social network. By exploiting its readers' desire to share stories over social media, a sponsored post can be seen by 30 percent more people than would be reached through a standard paid ad in a sidebar.
While BuzzFeed collects money from this activity, advertisers get the chance to embed their logos and products into the subconscious memory of the restless cubicle dweller likely to feed a certain existential discontent with the amnesiac bliss of shopping. BuzzFeed, advertisers, and readers are all getting something out of the equation, but only two of the three are actually making money. Individual readers are no longer valuable on their own, but only in aggregate, pass-throughs for the elephantine stampeding of Internet traffic, from which a small number of entrepreneurs can skim a slim profit margin—a mere $60 million reaped from 85 million readers. This is not the future of media but the end stages of a socio-economic structure buckling under the increasingly opposed ideals of being productive and being profitable.
When companies like BuzzFeed have to build sprawling media networks and sign deals to secure free or low cost labor to keep growing, it's a symptom of the decades-long decline of the monetary value of media. Media is still valuable, it's just that it's value is becoming harder and harder to sustain in monetary terms. Since fewer and fewer people make money from selling stories today, the next most profitable option is transforming readers into workers, who'll be compensated for their time and energy through social kudos and the theoretical gains of learning a foreign language. Basically anything but money.
Michael Thomsen is Complex's tech columnist. He has written for Slate, The Atlantic, The New Inquiry, n+1, Billboard, and is author of Levitate the Primate: Handjobs, Internet Dating, and Other Issues for Men. He tweets often at @mike_thomsen.