HuffPost: Where did it go wrong?
Yesterday HuffPost and Fairfax Media announced its joint venture had ended. Zoe Samios looks into why the international publisher struggled in the Australian market and how it fits into a digital media crisis.
‘In trouble’. A ‘cloudy’ future. ‘In doubt’. Those were the words being bandied around about US-based HuffPost’s venture in Australia before the news broke yesterday the publication had ended its joint venture with Fairfax Media and scaled back its local operations.
And now, what began in the US as a left-wing alternative to the Drudge Report, has essentially given up on its local arm after just two years. Not a surprise, if you ask the publishing industry.
It could be argued the brand took a turn for the worse last year, when Arianna Huffington stepped away from the company she founded, and those at the top took it in new editorial directions, moving away from it’s political focus.
one area that is worth looking at is:
– HP is owned by Oath … which also has 50% of a JV in AU that is being pulled apart by the JV partner
– Pac Mags has also pulled significant assets out of Y7 JV
– would make sense for Oath to move HuffPo sales into the JV, keep majority of the revenue and have little operational overhead. My feeling is HP will still generate enough audience to get some easy programmatic dollars running via the Yahoo platform
– having a JV in AU that had reasonable overheads was always going to be zero to negative financial return for HP/Oath and also Fairfax. HP is non core to Fairfax and AU is non core for HP as a business so it was always an odd marriage.
– the Janz model of cheap local rebrands was very strong 10 years ago but now the sales model has changed and the need for localisation isn’t there in content and sales … especially for the partners overseas.
Second this.. after being apart of Yahoo7 in AU this seems to make the most logically step. Scale back inventory to be a combined audience sell under the Oath brands.. while seven west take some of it’s core asset’s back from the JV with Yahoo it seems logical for Huffpost sales to be traded by the Yahoo sales team and Yahoo programmatic stack
Also worth remembering that the Australian economy is no bigger than a large US state. What works in the USA in terms of finding a niche will not necessarily scale down to Australia.
Not sure whether this will be a wake up call as HuffPo was never big enough in this market to make people sit up and notice, but there is a crisis in funding for News publishers.
As a vertical News is no longer an attractive environment for advertisers and Banner advertising not an attractive medium to communicate, which is a double whammy because News organisations have a lot of Banners to sell.
If its not Video then Banners are going to be traded programmatically at an average of $4 Cpm if you are lucky.. Do the Maths, $4 Cpm doesn’t pay the bills.
Video is where the high CPMs are, but the costs in producing enough volume make margins very tight.
Native was the saviour, but unless you are prepared to bastardise your product with overt brand messaging, pump money into driving traffic to it and tread that fine line between Commercial and Editorial, then the chances are that it won’t be the answer.
Facebook claim they are doing more to help publishers monitise their content…Thank god for FB eh, letting publisher monitise content that they have produced and spent money on creating. Call me a cynic, but if the publisher is getting a dollar then FB will likely be getting 10 somehow. The publisher will be kept on life support in order to feed the FB behemoth with content and data that enables them to suck even more revenue out of the system.
Advertising cannot support the news industry any longer – Just can’t. The only way is for readers to fund the news they consume and rightly so… The sooner everyone realises this the better..
Nailed it @ David watts.
But I still can’t help think there must be an editorial / design model that would provide digital adverting value to news sites, with all the benefits of digital, without being so obtrusive as to be off putting to audience.
Publishers providing content for social media channels (i.e. Facebook) for free is madness…particularly as there’s a discernible growing recognition that social media isn’t a reliable place to get accurate news, rather it’s a place to get entertainment around your own interests.
I have a few ideas if anyone would like to drop me a line…
I am with you on Publishers providing free content to Social Channels like FB…
I personally think that if the bigger publishers were to withdraw from Facebook (Say, top 10 from each marketplace) entirely and explain to their readers exactly why (ie, FB get ALL the money) then the public might start to understand…Also, if people knew they couldn’t get decent content on FB what would it do to time on the FB platform..I for one would not do my daily scroll if I knew there was no decent publisher content on there.
I’d even go one step further, Premium publishers should charge FB for content – radio stations and Spotify pay to play songs, whats the difference? Why not?.. Put copyright on their journalism and charge for re-publication. If it is genuinely of worthy then why give it away for free.
At present News media is suffering the death of a thousand cuts, barely surviving on morsels, hoping that they are the last man standing and can be sustainable. I’d rather go down swinging…
A modern society needs a healthy news sector, a genuine one, not one that is thrown bones by tech giants whose only interest is their own share price. At the moment news FB and Google are laughing as publishers pander to their whims, if it carries on then Huffpo will be the first, but not the last and if thats the case it has implications far beyond the media industry.
I have only ever clicked through to Huff Post, either from my suggested articles on Android, or on occasions from social media. All times, on a mobile and all times the site load seems slow with ad’s all over the shop; the experience is woeful = it aint gonna work, right?
spot on @ David Watts. Any media business — whether traditional media or digital pure-play — which relies on advertising as it’s main revenue stream is going to struggle to survive. Traditional media have the added baggage of legacy costs to contend with (printing presses, paper, distribution costs of physical product) but even the digital pureplays who don’t — Buzzfeed, Vice, HuffPo, Mashable — are up against it, as their most recent financial results and redundancies show. The question is whether media businesses will already be dead by the time the masses realise that the only way to keep them alive and to keep consuming the content they produce, is to pay for it.
Yet another venture that I first hear of only when its closure is announced.
It just always felt like such an American brand. Sure – Guardian etc are UK brands – but there’s a tonne more UK migrants and “British Australians” here (56% of Australians report their heritage as British Isles) than American ones. So that works for Guardian/BBC/Daily Mail/Economist.
People are parochial and loyal when it comes to news. There are strong Australian brands – like Crikey – that people here regard as “theirs”. Who feels a resonance or a kinship with “HuffPo”?
Sad but not surprised it failed.
When a publisher declines your offer for a 50% rev share split of revenue for their audience data without them needing to lift a finger post set-up, you have to wonder if the commercial team really knew how to do their job.
They had an asset and didn’t understand its full commercial opportunity. And they failed!
50% of nothing is…
Exactly what I thought.
Why would they give away their data for potentially nothing? Take on the risk of their core proposition being undermined by re-targeting.Data leakage.Potential brand issues. Slowing the site down by deploying another tag = losing traffic and poor UX.
I’m in a commercial team and often say no to giving away my data for potentially nothing. You sound upset that they didn’t take you up on your offer. Work the offer.
Be interesting to hear from Chris Janz on this.