Digital media clobbered by coronavirus
The drastic measures at top digital media outlets serve as a stark reminder that few victims will be spared by the economic crisis prompted by the coronavirus pandemic.
The big picture: Vice Media has laid out a plan for potential layoffs of over 300 people in digital operations, according to The Wall Street Journal. It would be joining Group Nine Media, BuzzFeed, Vox Media, Bustle Digital Group, Cheddar, Maven Media, G/O Media, Protocol and others who have resorted to layoffs and furloughs.
- Even Protocol, the digital-first tech website launched by Politico owner Robert Allbritton just two months ago, said Tuesday that it was laying off 13 staffers, including its editorial director.
Between the lines: It would be shocking if Vice, which lost over a billion dollars in value over the past few years, didn't make cuts. Vice spent roughly $400 million last year to acquire Refinery29, after investors had already begun writing down their investments in the company.
- "Vice is expecting online ad sales to suffer during the crisis, with expected shortfalls of 33% at Refinery29 and 39% at Vice’s entertainment and news sites, according to the document," the WSJ notes.
- A spokesperson tells the Journal no such plans are final.
Be smart: The economic crisis caused by the pandemic is different from previous recessions because it's likely to have a worse impact on the ad industry and because it will hit other revenue that publishers rely on, including live events.
Flashback: Digital media companies were riding a wave of optimism just a few months ago, with many expecting to finally become profitable in 2020. Now, those plans are pipe dreams.
- "You do wonder if certain types of media will come back from this,” said Nicholas Carlson, editor in chief of Business Insider, in an interview with Vanity Fair.
Editor's note: This article has been updated to correct that Protocol is owned by Robert Allbritton, who is also the owner of Politico. The original version said that Politico launched Protocol.