‘Math doesn’t add up’: Publishers still face tough choices

Digiday 02 Apr 2020 04:03

Almost exactly a month ago, which seems like a decade ago, I ran into a CEO of a major digital publisher on the street in New York City. At this point, coronavirus was not spreading in New York, coffee shops were packed and we complained about packed subway commutes. I asked the CEO how much impact the virus was having on business. “Not much,” I was told.

Those were certainly more carefree days in retrospect. This week, the ramifications of the downturn began to manifest itself at publishers large and small. BuzzFeed, Vice Media, Group Nine, Gannett and others all took steps to rein in costs. BuzzFeed set the tone with a series of measures that avoided layoffs. Outside of Gannett, which was severely challenged with or without a pandemic, the biggest publishers did not lay off staff or furlough them. Instead, pay cuts were enacted along with other measures.

The question many I have spoken to have is how long this strategy can last. Last week, I wrote about how crises expose weaknesses in organizations. For the big venture-funded digital publishers — Vox has curiously been quiet about steps it is taking — they are stuck with a difficult set of choices. Pay cuts are more symbolic than anything else. The top executives taking cuts won’t make the numbers work, much less shaving off 10% of salary for people making $70,000 a year. Cutting back on paying platforms to boost content will save money, but is it enough? Most I’ve spoken to believe not, especially when the general consensus is the overall ad market will be down 25% or more this year.

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BuzzFeedGannettVice Media Group NineNew York CityRich Antoniello
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