By now, we all have heard reports that Buzzfeed and Vice will miss their revenue targets. Mashable has been sold for a fifth of its 2016 valuation, and there are more reports of chaos at Mic after its pivot to video. And Spirited Media, which was seen as a promising model for local media, laid off staff in what CEO Jim Brady called a “shitty week”. What does this mean?

• I’ve been saying this for a few years now, the chase for scale with 20th Century mass media strategies doesn’t work in the age of the Duopoly. Their scale dwarfs the scale that media companies can cost-effectively create.
• Advertising as the sole source of revenue has been looking shaky for quite a while, and with print advertising collapsing across the English-speaking world and digital advertising being eaten up by Google and Facebook, media companies will have to find other revenue streams. (Kudos to Jim Brady and
• VC funding for mass Millennial media products is done for the moment.
• The “pivot to video” was driven much more by advertising revenue than audience demand.
• Look for 2018 to be the “pivot to affiliate”. Media folks are herd-like creatures, and the success of Wirecutter and Penny Hoarder will not have been lost on them.

I agree with Josh Marshall, we’re in the midst of a digital media crash, or more accurately, a VC-funded digital media crash in the middle of a broader legacy media crash wrapped in an even broader media realignment the likes of which we haven’t seen since the invention of the printing press. As I wrote about at the beginning of 2016, there has been trouble in the Attention Economy for a while. I thought that we were reaching Peak Content,  a point where the race to create more content in the foolish chase for scale ended because it just became economically unsustainable.

Of course, those who followed funding closely knew that there was trouble in VC-funding of media. I had heard from friends in funding circles that recent investment rounds were going for ridiculously low multiples in terms of earnings, and for those who follow media funding closely, like my grenade-tossing friend Rafat Ali, this reckoning has been coming for a while. And that reality is hitting start-ups big and small. Brady said that the layoffs at Spirited Media were caused by a lower than expected funding round.

Another media crash

I have lived through a few media crashes already in my career, including the dot.com crash and the Great Recession. I think this crash will be much more like the dot.com crash, which in media terms has long passed from memory because most of the media folks in digital media in the late 90s left. They struggled to get hired back into legacy media, and they simply pivoted into something different. I consider myself fortunate, I was working for the BBC as their first digital correspondent outside of the UK. Our unique public funding model allowed us to continue to innovate even in the teeth of the crash. It’s been tough for mid-career journalists like myself to stay in the industry since the Great Recession, and sadly, in 2017, I saw it get tougher for younger journalists as well.

But this crash in digital media will be different than the dot.com crash. In 2001, people questioned whether you could make money with digital advertising, and there are some who are asking the same question. But it’s the wrong one. People are making money, billions of dollars in digital advertising. It just isn’t the media, and that has been the problem for a long time, even before the last two years when it became clear that The Duopoly were gobbling up most of the digital advertising revenue in the world.

How it is slightly different this time…

But this crash is different because unlike the dot.com crash, which wiped out an early wave of digital-first media companies, we do have models that are working. And I’m not just talking about the Financial Times or the New York Times. There are a lot of really fascinating start-ups that have solid models deeply serving much smaller audiences – Skift, The Skimm and Penny Hoarder. As Rafat, founder and CEO, of Skift wrote on Twitter.

Next week about 30 vertical media company founders are gathering in NYC, each one of their companies growing fast with little money raised & almost all of us profitable, doing deep meaningful work & a big part of the lives of those who care about them.

— Rafat Ali, Media Operator & Dad (@rafat) November 20, 2017

There is a lot that is working, and I’ll go into that later. It will have to wait until taking a much-needed break over Thanksgiving.