BuzzFeed cofounder and CEO Jonah Peretti and Vice cofounder Shane Smith seem like pretty different people -- and, for all indications, they are.
The hard-talking, T-shirt-wearing Smith enjoys being in front of the camera, the kind of guy who doesn't seem to mind offending people. Peretti, while not a terribly shy person, tends to come across in the media in more measured, thoughtful soundbites.
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Their companies' origins and brands are also distinct. Vice started as a magazine based in Montreal in 1994, and took some twists and turns before becoming the counterculture voice it is today. BuzzFeed began 12 years later in 2006 as an attempt to combine an analytical approach to digital virality and content into a distinctly Internet vox populi.
But that might be where the differences end. Vice and BuzzFeed now appear to be converging on the same business, and video is an integral part of it.
Both companies have grown significantly over the past several years, in part due to major investments. Those changes have begun to make the two companies look very similar: major media outlets anchored on the Internet with a serious international footprint and serious video aspirations.
Digital made the video star
BuzzFeed's $50 million investment from Andreessen Horowitz, which was announced Sunday night, is its fifth round of funding. The company had been primarily backed by investments from Ken Lerer, Hearst Ventures and SoftBank Capital through a various rounds of funding that had amounted to $46.3 million.
Vice raised $70 million in August from Rupert Murdoch's 21st Century Fox, $50 million of which is reportedly slated to boost the company's news video production.
Video is a moneymaker both in its ability to attract ad dollars and open doors. As eMarketer shows, digital video ad spending is increasing rapidly but expected to level off. Unless there is some dramatic sea change, TV is still the most lucrative video platform. Movies, meanwhile, set a 2013 box office record for revenue.
US TV vs Digital Ad Spending | Create Infographics
Vice has already made major inroads on TV with its HBO show, which ended its second season in June. Eddy Moretti, the chief creative officer, told the audience at the season premiere event: “We hope to be as frequent in your lives as 60 Minutes was for the last generation.”
BuzzFeed's funding news coincided with its announcement that the company's video unit would now be known as BuzzFeed Motion Pictures. The new division will begin to explore longer pieces in addition to its short-form content. It is looking even beyond TV.
"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," the company said in a press release. Veteran Hollywood producer Michael Shamberg and comedian Jordan Peele of Comedy Central's Key and Peele have already been signed on as advisors.
TV and movies are competitive industries with no guarantee of success, and there is no shortage of digitally native video content creators with the addition of companies like Netflix, Amazon, Hulu and Yahoo, or even upstarts like Epic Rap Battles of History or the plethora of YouTube stars that have emerged.
BuzzFeed will need to prove that its deeper understanding of content can go beyond viral listicles and quizzes and attract a broader video audience.
The Internet stays in the picture
This is not to sell short the digital success of BuzzFeed or Vice; both have found the kind of Internet success that have caused legacy outlets to scramble to catch up. BuzzFeed logged more than 74 million unique viewers across its platforms in the U.S. in June 2014, up from 32 million during the same period last year, according to comScore data. Vice logged just over 24 million uniques, up from 7.6 million.
Relying purely on digital, however, is beginning to be seen as a risky proposition. In the New York Times story that broke the news on BuzzFeed's funding, Mike Isaac pointed out that BuzzFeed relies heavily on social media traffic, particularly from Facebook. It is not a problem unique to Facebook, but a concern for a company that unlike a CNN or BBC, has no other mature businesses.
Digital media also has a problematically low barrier of entry. Social sharing tracker NewsWhip reported that a new entrants like Bored Panda and an Israeli BuzzFeed knockoff called PlayBuzz have quickly gained traction on Facebook, which has emerged as the dominant traffic driver for digital media.
This is something BuzzFeed's own tech editor, Charlie Warzel, has noticed.
what on earth is boredpanda? pic.twitter.com/6JHxWpH7oc— Charlie Warzel (@cwarzel) August 8, 2014
And just as fast as some have risen, others have fallen. Upworthy, once looked to as the hot new viral media startup, saw its traffic decline almost as fast as it rose. The site is still viable, but acts as something of a warning to sites that believe traffic graphs only move up and to the right.
Growing a video operation alleviates many of the risks inherent in being a digital media outfit. Video requires the kinds of million-dollar investments that Vice and BuzzFeed have received, helping insult them from the Bored Pandas of the world and open the door to major revenues streams.