Welcome to the latest from Scotch and Watch, a weekly unscripted and usually-pretty spicy carve-up of the collision of Big Tech and Big Media.
This week, former Bauer CEO
and I dive into the decision by Business Insider to cut 21 per cent of its workforce as Google slashes its search traffic.Was this sensible rightsizing in an unstable market? Or the latest capitulation by a defeatist publisher desperate to keep the lights on?
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Business Insider announced the deep cuts last week, blaming financial challenges and the need to streamline operations to focus on its core.
What stood out to me was the timing. We’re less than 70 days from a judge’s decision on how Google will be broken up to pour traffic and revenue back into media.
Insider’s CEO Barbara Peng told staff the company relied for 70 per cent of its traffic on Google search, and that had become unreliable.
Page views have cratered more than half in recent months, and the future looks bleak with AI Overviews directing traffic to Google’s owned and operated sites.
This is not new, I have predicting it for more than a year.
The proof is now here for all to see this.
The Wall Street Journal has just published charts and data showing the impact of the changes that I have been warning have been coming.
But with major change just months away, why would Business Insider cut now? And why cut so deep?
Business Insider was started in 2007 by superstar US media analyst
and grew to be a well-regarded forward-thinking publisher, deeply embracing digital.Its audience soared to a reported 325 million people worldwide and at its peak, the company employed almost 10,000 people.
It was a torchbearer for subscriptions, building an in-depth reports and analysis wing called BI Intelligence delivering special reports and insights on digital trends.
It also grew a strong newsletter business.
In 2015, it was sold to German publisher Axel Springer for US$343 million, ~$100 million more than Amazon billionaire Jeff Bezos paid for The Washington Post.
Revenue peaked at $290 million, with cash coming from all its business units, but mainly through search traffic monetised by premium programmatic ads.
Now that’s all at risk and CEO Peng said focus was now shifting to premium content and away from search-dependent revenue.
“The media industry is at a crossroads,” she said. “Business models are under pressure, distribution is unstable, and competition for attention is fiercer than ever.
“We must be structured to endure extreme traffic drops outside of our control, so we’re reducing our overall company to a size where we can absorb that volatility.”
In our chat, Chris and I analyse the decision, and the conversation takes us on a journey through the best models for publishers in a post-Google future.
Is mass media at an end? And are subscription newsletters like this one, and platforms like Substack, a way to mass the niches for a new media future?
Someone who seems to think so is
himself. He’s just launched his own Substack.
Scotch and Watch has just returned from a US tour on Broadway and will be back on stage at the FIPP World Congress in Madrid in October.
If you’d like to host an episode, you can. Anywhere in the world. Here’s what to do.
This is the latest episode from the fast-growing Future Media podcast stable. You can tune in here or on Spotify, Apple, Art19, or wherever you get your pods.
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