I first came across the term “digital media bubble” about three months ago. I was skimming the news from the Wall Street Journal on my phone and saw a news saying that BuzzFeed’s revenue had declined in 2017. Compared to BuzzFeed’s target of $350 million gains, its actual data were 15% to 20% less than its expectation. I didn’t think this to have much significance right after I read this news because BuzzFeed still has a positive and steady growth rate on revenue. However later when I was looking at all these apps I’ve installed on my phone and thinking about how convenient life had become because of technology, this news suddenly flashed into my mind: if our life is getting better because of the fast-developing technology, why digital-based media platform is experiencing a decrease in profit and investment? I then started searching for news related to the declining revenue of BuzzFeed and found a few articles also attached importance to this issue which was referred to as “digital media bubble”. It is said that, for purely digital-based companies like BuzzFeed and Mashable, they are not performing as well as predicted. For these free sharing and blogging platform, their main way to make profits is through advertising. However, Facebook and Google have occupied more than half of the market share of advertisements, which leaves other companies little percentage on average.
I am curious about whether the purely digital based media companies are really experiencing a downfall. Also, is not having a tangible form their drawback, which I assume used to be their advantage and point of publicity when they just started the business. If not, what other reasons could be to explain BuzzFeed’s declining profit? Could it be the quality of the contents shared on BuzzFeed does not keep up with the user and investor’s demand? (According to this picture below illustrating the credibility of news sources, BuzzFeed falls on the categories of almost “Poor Quality” and “Garbage Left)
As a Media Studies student who is looking for jobs and internships in advertising agencies and media companies, I think researching on this issue helps me to evaluate the situation of the market and the future path of my career. I am also interested to know the investor’s thoughts on which digital media platform to deliver ads.
So far, I still consider digital based media platform to have huge potential. Digital devices have become an indispensable part of our life. I always think compared to a real newspaper or a magazine, an app on my phone occupies less space and is way more convenient. Also, a paper copy will cost extra money to spend on it while a lot of subscriptions on your phone is free. Based on this evidence, the user of digital media platforms should be increasing. But does the actual profit a company can make not measured by or even not much related to the number of users they have? If more users will surely lead to more investments and therefore more income, why did the large ads investment on Facebook and Google had so much impact on the growth of other digital media platforms last year?
As I keep thinking about this issue, it becomes to seem like a paradox to me and there are so many things I can research on and learn about. I am looking forward to digging into the phenomenon of “digital media bubble” to find out the true situation of digital media platforms and how that might differ from what the masses consider digital media platforms.