Can BuzzFeed Build a Newfangled Media Conglomerate With $50 Million?by
Often it feels like just a matter of time before BuzzFeed expands beyond Facebook, beyond Twitter, beyond earth, and starts launching extraterrestrial outposts in such places as Jupiter, Venus, and Mars. It’s just a matter of time before pods of cheerful, young BuzzFeed staffers are scattered across the solar system, cranking out must-read lists like, “47 Reasons to Love Living on the Bright Side of the Moon.”
BuzzFeed’s appetite for far-flung conquests can at times seem insatiable and inevitable. On Sunday, for example, BuzzFeed announced that in the months ahead, the company will use a $50 million injection of Series E funding from Andreessen Horowitz to fuel a new wave of expansion. (Bloomberg LP, which owns Bloomberg Businessweek, is an investor in Andreessen Horowitz.) Among other things, BuzzFeed will invest in its editorial news team, which will add outlets in India, Germany, Mexico, and Japan. It will build a test kitchen and launch a food lab. It will incubate technology and prowl for possible acquisitions. And it will launch “BuzzFeed, Off BuzzFeed,” which sounds like an in-house detox center for meme-addled staffers, but in reality has something to do with experimental content distribution. And that’s not all.
In what is arguably the site’s most extravagant gesture to date, BuzzFeed announced on Sunday that it will also form a division called BuzzFeed Motion Pictures, designed to master the movie business. Per the release: “Ze Frank will lead the division as President of BuzzFeed Motion Pictures and will expand to focus on all moving images from a GIF to feature film.”
And they will do it all with … $50 million?
To date, as far as I can tell, no reputable economists have published peer-reviewed studies attempting to quantify the median investment required when jumping from a “GIF to feature film.” It’s probably not a small number. What does $50 million get you in the contemporary, blockbuster-driven movie business? For starters, less than a third of the production budget of Dawn of the Planet of the Apes. Translation: a few CGI bananas.
During its brief life span, BuzzFeed has succeeded, in part, by pioneering a short-form genre of meme-powered, Reddit-inspired, photo-aggregation lists that are not only more fun than a barrel of monkeys but cheap to manufacture in bulk and essentially free to distribute. For a form of popular, mass entertainment, the costs are incredibly low. The challenge for BuzzFeed will be that as it pushes into traditional genres of media, whether long-form journalism or long-form movies, the cost of production will ratchet up significantly.
At the same time, BuzzFeed will increasingly find itself competing directly for talent, technology, and ideas with deep-pocketed rivals. For the likes of Rupert Murdoch, $50 million is what a single, thriving cable network such as, say, Fox News throws off in profits every couple of weeks. That’s not war-chest money, in other words. It’s more like yacht money.
Which is not to say that BuzzFeed won’t someday “lol” and “wtf” its way to the kind of scale currently enjoyed by the multi-billion-dollar companies atop the media food-chain. Those conglomerates, in fact, are in the process of slimming down after years of binging on mergers, acquisitions, and all-around gluttony. Maybe someday, Buzzfeed will meet them in the middle. For now, its journey from GIF to feature film is likely to be long and difficult.
“Lots of companies look like toys in their early growth days, and that’s sort of the pitch here,” Paul Kedrosky said on Monday via Bloomberg TV. “But taking it from this point to something much bigger and more profitable is very difficult to see. I struggle to figure out how that works from here.”
Two words: BuzzFeed Pluto.