Embattled Buzzfeed puts its faith in short form vertical video and AI

by | Mar 16, 2023 | News

Digital media company Buzzfeed has reported revenues of $436.7 million for 2022, up 10% compared to 2021. However, the picture for Q4 2002 was less positive, with revenues down 8% to $134.6 million. Advertising revenue was particularly hard hit in Q4, down 27% year-over-year to $50.5 million. However, content revenue also dropped 9% y-o-y to $54.8 million.

“There’s no denying that 2022 was a tough year for digital media,” said Jonah Peretti, BuzzFeed founder & CEO. “The challenges we faced in Q4 are also impacting us in Q1 2023, and it is clear we have more work to do to realise the full potential of our combined brand portfolio.”

Buzzfeed’s share price spiked in January 2023 following reports of a partnership with Facebook and news of its interest in AI. But since then it has lost virtually all of those gains. After its end of year results were released on March 13, the share price dropped again and has been further depressed by the ongoing fallout from the collapse of Silicon Valley Bank.

Peretti remains upbeat however: “As we work to address these challenges, our value proposition continues to resonate strongly in the marketplace. With iconic brands, a massive audience and a differentiated technology platform, we occupy a unique position in the ecosystem of audiences, creators, platforms and advertisers. And, our work in the exciting new areas of creators and artificial intelligence are continuing to lead the way in defining the future of media.”

For the full year, advertising accounted for 46% of Buzzfeed revenues while content was 38%. The remaining 16% came from “commerce and other revenues”, which includes affiliate marketplace, product licensing and events revenue. The company said that time spent on its owned and operated properties, such as the Eating Your Feed format (pictured) grew in 2022 “but was offset by declines on third-party platforms, resulting in a 21% decline in overall time spent, to 624 million hours”.

Part of the problem facing Buzzfeed has been the social media audience’s rapid migration towards short-form content. In response, BuzzFeed doubled its short-form vertical video output across TikTok, Instagram Reels and YouTube Shorts in 2022. Speaking during an earnings call, Peretti said that Q4 viewership of Buzzfeed’s short-form content increased threefold y-o-y.

On the subject of SVB, BuzzFeed said it “ended the year with cash and cash equivalents of $56 million. As of March 10, 2023, the majority of the Company’s cash and cash equivalents balance were held at Silicon Valley Bank. However, the US government reassured that all depositors will be fully protected. The Company does not anticipate any disruption to its ongoing operations”.

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