Staff meetings at BuzzFeed are not uncommon. Jonah H. Peretti, the site’s founder and chief executive, who is based in Los Angeles, travels to the New York offices regularly and often meets with employees to answer questions or outline strategy.
But two recent meetings took on greater import, after BuzzFeed told employees two weeks ago that it was formally dividing its news and entertainment divisions. The day the reorganization was announced, Ben Smith, the editor-in-chief, met with the news staff to reassure them that the company was committed to its news operations.
And last Wednesday, Peretti held a Q&A session and vowed that the company was not planning to sell its news division.
Staff members at BuzzFeed said the overhaul provoked curiosity rather than deep anxiety. Still, BuzzFeed’s reorganization seemed a transformative moment for a company staking a big bet on the future of video and entertainment.
Already, video represents more than 50% of BuzzFeed’s total revenue, compared with 15% at the end of 2014. In the next two years, BuzzFeed expe-cts that video will generate up to 75% of its advertising revenue, according to a person briefed on the company’s operations.
The move also reflects a broader shift at media companies that are increasingly turning to video and entertainment news to lure a younger generation and attract online advertising dollars.
In April, the website Mashable made a round of job cuts as it moved away from covering world and political news, and Mic, a site aimed at a young audience, hopes to have 60% of the company focused on video by year’s end.
Traditional news organizations like The New York Times and Tronc, formerly called Tribune Publishing, are investing heavily in video as well.
As video moves from an ancillary pursuit to a more important source of revenue, the shifts in structure and emphasis are causing major changes and some uncertainty in newsrooms.
“In any company, especially one that’s going through rapid scale and one that has geographical disbursement, there are disconnects that come up,” said Ze Frank, who until the recent reorganization was president of BuzzFeed Motion Pictures, the company’s video division.
Under the new structure, Smith, who is based in New York, will lead BuzzFeed News, and Frank, who is based in Los Angeles, will oversee a new division called BuzzFeed Entertainment Group. It no longer made sense, Peretti said in a memo to employees, for BuzzFeed to have “a single ‘video department’.”
Instead, Smith’s department will have its own news video team, and Frank’s division will oversee non-news video, like Tasty food videos, as well as the lists and quizzes that are BuzzFeed’s bread and butter.
“As digital video becomes ubiquitous,” Peretti wrote in the memo announcing the change, “every major initiative at BuzzFeed around the world will find an expression as video”.
For years, BuzzFeed has been viewed as a digital success story. Its viral content has been the envy of the media industry and its business model, built on so-called native advertising rather than display ads, enticed brands that wanted to reach younger demographics.
It has expanded internationally, with offices in cities including London, São Paulo and Tokyo. Last year, the company received a $200 million investment from NBCUniversal.
But BuzzFeed is facing challenges similar to those faced by both traditional and start-up media companies. In July, BuzzFeed drew 72 million unique visitors in the US, the lowest number since August 2014, according to the measurement firm comScore. (Peretti pointed out that comScore’s data did not accurately reflect how many people viewed BuzzFeed’s content across the web and on mobile platforms.)
In April, the Financial Times reported that BuzzFeed had missed its revenue target for 2015 and had halved its projection for this year. BuzzFeed has disputed the report, but has not provided its own numbers.
“The number we set at the beginning of the year we have been ahead of,” Peretti said, “and we are happy with where we are as a business.”
BuzzFeed’s decision to separate its news and entertainment divisions follows similar moves by media companies like News Corp. and Tribune Co., raising the question of whether BuzzFeed would de-emphasize or even spin off its news operation.
“We have seen in legacy organizations the splitting off of what might be deemed to be less profitable news and more profitable entertainment divisions,” said Emily Bell, the director of the Tow Center for Digital Journalism at Columbia.
“If you were being very positive,’’ she said of BuzzFeed’s reorganization, “you might say perhaps they are going to find a way to make news sustainable in the long term. When you start enumerating what’s very positive about it, you can also see that this isn’t necessarily an out-and-out piece of good news.”
Bell added, “What this underlines in a way is what everybody else is experiencing, which is that high-quality news can make money, but it’s a real struggle.”
Kenneth Lerer, BuzzFeed’s executive chairman, dismissed the idea that the company was moving away from news.
“We are completely 100% committed to news as much now as ever,” he said.
Interviews with nearly a dozen current and former BuzzFeed employees, including Peretti, Smith and Frank, also reveal deeper reasons for the reorganization, including resource allocation, clarity of reporting lines and an undercurrent of tension between Frank and Smith.
As BuzzFeed News began producing more video, it largely had to rely on Frank’s team for resources, an arrangement that at times caused friction.
Some employees, including Peretti, acknowledged there was tension between Tasty, the successful cooking channel overseen by Frank, and BuzzFeed Food, which was introduced in 2012 and ran under Smith’s oversight.
With the overhaul, Smith will gain his own news video team, run by one of Frank’s protégés, Henry Goldman.
“There are logistical things that I think this will resolve,” said Mark Schoofs, the investigations and projects editor.
Peretti started BuzzFeed in 2006 as a kind of laboratory for shareable content. Not until late 2011 did BuzzFeed begin building its news side when it announced it had hired Smith, a star political reporter at Politico.
Over the past several years, BuzzFeed has added a business team, a science team and an investigative team led by Schoofs, a Pulitzer Prize winner. At the same time, it has also pushed aggressively into video and entertainment.
One factor in any perceived strain at BuzzFeed is the company’s rapid growth, executives said. It now has more than 1,300 employees across the globe.
©2016/THE NEW YORK TIMES