Buzzfeed, the top digital media company, has announced a significant shift in strategy as it embraces artificial intelligence (AI) and content creators while phasing out human journalists.
The company’s recent financial report for the first quarter of 2023 reveals a decline in revenues and a continued focus on innovation to drive long-term growth.
Buzzfeed’s Q1 2023 financial results
Buzzfeed’s Q1 revenues totaled $67.2 million, a 27% decrease compared to the first quarter of 2022. Advertising revenue fell 30% year-over-year to $34.2 million, while content revenue experienced a 33% drop to $21.6 million.
On the other hand, commerce and other revenues saw a 6% growth, reaching $11.3 million. The company reported a net loss of $36.3 million, which was an improvement from the $44.6 million loss in Q1 2022. Adjusted EBITDA loss amounted to $20.2 million, compared to a loss of $16.8 million in the same period the previous year.
Despite the decline in revenues, time spent on Buzzfeed’s content remained relatively stable, with a minor 3% decrease to 109 million hours. The company ended the period with cash and cash equivalents of approximately $50 million.
Jonah Peretti, Buzzfeed Founder & CEO, acknowledged the challenging landscape of digital media and emphasized the importance of adaptation.
He envisions unlocking new opportunities across the company’s trusted brands such as Tasty, First We Feast, Complex, HuffPost, and Buzzfeed itself. Peretti stated, “By leaning into Creators and AI, I believe we can unlock new opportunities across our portfolio of trusted brands.”
The role of AI in digital media
Artificial intelligence has become increasingly prominent in the digital media landscape, offering the potential for increased efficiency, cost savings, and innovative content creation methods.
Buzzfeed’s decision to embrace AI reflects a broader trend in the industry, as other media companies may also begin exploring similar strategies to stay competitive and relevant.
AI-powered content generation tools can create high-quality content in a fraction of the time and at a lower cost compared to human journalists.
Additionally, AI algorithms can assist with content optimization for search engines, ensuring higher visibility and engagement.
These benefits make AI an attractive solution for media companies looking to maintain a strong presence in the fast-paced digital age. This transition could ultimately revolutionize the way news is produced.
For the second quarter of 2023, Buzzfeed expects overall revenues to be in the range of $76 to $81 million and Adjusted EBITDA to fall between $0 and $4 million. These forward-looking statements are subject to change, and actual results may differ due to a variety of factors.
Buzzfeed’s focus on AI and content creators signals a transformative shift in the digital media landscape. The company aims to capitalize on new technologies and innovative approaches to content creation, staying ahead of the curve in an ever-evolving industry.
Time will tell if Buzzfeed’s gamble on AI and creators will pay off, but one thing is clear: the era of human journalists at Buzzfeed is coming to an end.
