There’s a Digital Media Crash. But No One Will Say It

TPM Editor Josh Marshall, who runs a membership model for his politics publisher, has written a very short critique of the reasoning behind the forthcoming crash in digital media. It is your must-read of this week if you have not already seen it, and it comes at the perfect timing given the events below.

The biggest sign of this has been the 'pivot to video' which Josh argues is not at all due to customer demand, but rather that of advertisers. They are pivoting to video because that is where the advertisers will give them money: why now? Because the money they were relying on, venture capital, is drying up.

VCs have realised that media is not a profitable enterprise with relation to advertising at scale when titans like Facebook and Google exist and are swallowing all the growth. Very soon we'll be looking at a rapid crash in VC backed media.

Who, if anyone, is having a good year in ad-funded digital media?

Fred Wilson, a VC at Union Square, said in January:

It will be nearly impossible to raise money for an online advertising business in 2017

Yup, in fact most recent investments in new-media have been money from old-media.

Refinery29's last $45m round was investment from Turner and Scripps.

BuzzFeed's last two rounds, totalling $400m, were both led by NBC.

Vox's last round was $200m from NBC.

Vice are the exception, raising $450m from a VC fund this year, but previously had two $200m rounds raised by Disney.


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