by tyler | Apr 20, 2023 | CNN, media
BuzzFeed News, the Pulitzer Prize-winning digital news website that that took the internet by storm roughly a decade ago and inspired jealousy from legacy media organizations, will shutter, BuzzFeed chief executive Jonah Peretti announced Thursday.
The move was part of broader layoffs across BuzzFeed, Peretti said in a memo to staffers, with the company moving to slash 15% of its workforce, or 180 employees.
“While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization,” Peretti told staffers.
BuzzFeed has “begun discussions with the News Guild,” the union which represents staffers at the company, about the actions.
Peretti, who addressed the emotional newsroom for nearly an hour on Thursday morning, indicated that some staffers might be able to find roles at HuffPost, the digital news website that BuzzFeed acquired in a 2020 deal.
“HuffPost and BuzzFeed Dot Com have signaled that they will open a number of select roles for members of BuzzFeed News,” Peretti told employees. “These roles will be aligned with those divisions’ business goals and match the skills and strengths of many of BuzzFeed News’s editors and reporters.”
“Moving forward, we will have a single news brand in HuffPost, which is profitable, with a loyal direct front page audience,” Peretti added.
While jarring, the news was not particularly surprising. Years ago, BuzzFeed invested vast sums of money into its news product, poaching top journalists from legacy newsrooms and opening bureaus across the world. But the company in recent years has moved away from that approach, dramatically slimming down its newsroom.
The news that BuzzFeed News will shutter prompted an outpouring of messages posted online from former BuzzFeed News staffers who expressed sadness and dismay. “What a ferocious travesty and a huge loss to journalism,” John Paczkowski, a Forbes executive editor and former BuzzFeed News journalist wrote on Twitter. Kate Nocera, an Axios editor and former bureau chief at BuzzFeed News, noted that the news was “a long time coming,” but said it still “stings.”
Ben Smith, the founding editor-in-chief who left the outlet years ago and co-founded the digital upstart Semafor, told CNN that he is “heartsick” about the news.
“I do think it makes really clear the relationship between news publishers and social media is pretty much over,” Smith added, alluding to the fact that BuzzFeed’s growth was powered by the sudden growth of platforms such as Facebook and Twitter a decade ago.
Peretti said in his memo to staffers that the economic environment had played a role in the moves announced Thursday, but he also took part of the blame.
“I also want to be clear: I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances,” Peretti said.
“I made the decision to overinvest in BuzzFeed News because I love their work and mission so much,” he added. “This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media.”
Peretti said that broadly speaking, he regretted that he didn’t “hold the company to higher standards for profitability, to give us the buffer needed to manage through economic and industry downturns and avoid painful days like today.”
“Our mission, our impact on culture, and our audience is what matters most,” Peretti said, “but we need a stronger business to protect and sustain this important work.”
A spokesperson for BuzzFeed News told CNN that there are “ongoing discussions” about the future of the outlet’s website, but said that all the work will be archived and available after the newsroom shutters.
BuzzFeed announced in January that it will use artificial intelligence to create content for its website. That announcement sent its stock spiking more than 150%, before it ultimately fell back down to where it was, reflecting the broader uncertainty in the industry. Thursday’s announcement of layoffs and the shuttering of BuzzFeed News also sent the company’s already dangerously low stock down another 20%.
Edgar Hernandez, chief revenue officer, and Christian Baesler, chief operating officer, will depart as part of the company changes, Peretti also said on Thursday. Marcela Martin, president, would “take on responsibility for all revenue functions effective immediately.”
BuzzFeed is not the only news organization facing struggles. Nearly every major news, media, and technology company has announced layoffs in recent months. Insider on Thursday, for instance, said it will lay off approximately 10% of its staff, telling employees in a memo that the “economic headwinds that have hurt many of our clients and partners are also affecting us.”
by tyler | Apr 19, 2023 | CNN, media
Fox News will pay more than $787 million to Dominion Voting Systems after the two sides reached a last-minute settlement Tuesday in the explosive defamation case tied to the news network’s lies about the 2020 US election.
It is the largest publicly known defamation settlement involving a media company in US history.
The outcome is a painful one for Fox, which acknowledged the court’s findings that “certain claims about Dominion” are “false,” a rare admission that the network spread misinformation.
The bill for Fox’s conduct in the wake of the 2020 election could yet swell significantly if another voting technology company — Smartmatic — is successful in its own $2.7 billion lawsuit. But for now, the price tag attached to the Dominion case isn’t the worst Fox chairman Rupert Murdoch has had to stomach.
A phone hacking scandal involving Murdoch’s tabloid newspaper empire in the United Kingdom has proven much more costly over the past decade or so. The financial fallout of that scandal topped £1 billion, or $1.24 billion, according to a 2021 investigation by Press Gazette, a British publication focused on the media industry.
The Press Gazette added up costs related to the scandal, which were disclosed between 2011 and 2020. It looked at legal fees and damages, as well as expenses tied to the subsequent restructuring of Murdoch’s UK media empire. The costs have risen further since 2020.
The editor of Murdoch’s News of the World and a private investigator were convicted of conspiracy to hack the voicemails of British royals in 2007. The scandal burst back into the spotlight in 2010 and 2011 amid allegations that phone hacking was a common practice at the Sunday tabloid and that UK police had been complicit.
British journalists stood accused of illegally hacking the voicemails of thousands of people, ranging from top politicians and celebrities to murder victims and the families of troops killed in action.
The News of the World, one of Britain’s oldest and best-selling newspapers, was ultimately shuttered in July 2011, shortly after it was revealed that journalists at the publication possibly hacked into the voicemail of missing teenager Milly Dowler in 2002 and deleted messages to free space, causing her parents to believe she was still alive.
A few months later, News International, the paper’s publisher, agreed to pay £2 million ($2.5 million) to Dowler’s family. Murdoch agreed to donate £1 million ($1.2 million) to charities of their choice.
The Press Gazette also included in its tally more than £300 million ($373 million) in costs tied to the closure of the News of the World and the breakup fee for Murdoch’s attempted takeover of British broadcaster BSkyB, which was dropped in 2011 as negative coverage ballooned.
In the years since, legal costs for Murdoch-owned media companies tied to phone hacking — a practice for which Murdoch has since apologized — have continued to climb.
Payouts have gone to public figures such as singer Elton John, actress Elizabeth Hurley and Heather Mills, the ex-wife of Paul McCartney.
And the scandal isn’t over yet. The publisher of The Sun tabloid, another Murdoch title, said it incurred nearly £47 million ($58 million) in costs tied to “allegations of voicemail interception and inappropriate payments to public officials” in the year to July 3, 2022. News Group Newspapers (NGN) has set aside another £53 million ($66 million) for additional claims. The ultimate cost may be significantly higher or lower once those cases are resolved.
Britain’s Prince Harry and actor Hugh Grant are among those who have filed legal challenges against The Sun tied to phone hacking.
In a statement, NGN said: “In 2012, an unreserved apology was made to all of those who had brought cases against the News of the World for voicemail interception. Since then, NGN has been paying financial damages to claimants.”
It added that “a number of disputed claims,” including some involving The Sun, were still going through the courts.
“The Sun does not accept liability or make any admissions to the allegations. It is of course common litigation practice for parties to reach a settlement before trial to bring a resolution to the matter for commercial reasons,” NGN said.
Phone hacking claims have proved costly for other media companies too. Grant settled a phone hacking case against Mirror Group Newspapers, which owns the Daily Mirror, Sunday Mirror and Sunday People, for an undisclosed amount in 2018.
The company had admitted all three newspapers had hacked into his voicemails.
Separately, Prince Harry is pursuing Associated Newspapers over allegations of unlawful information gathering. The Duke of Sussex last year joined a group of high-profile figures in legal action against the publisher of the Daily Mail, the Mail on Sunday and the Mail Online.
The lawsuit accuses Associated Newspapers of engaging in various means of criminal activity to obtain information on high-profile figures over the years.
by tyler | Apr 19, 2023 | CNN, media
Veteran mediator Jerry Roscoe was on a relaxing river cruise from Budapest to Bucharest celebrating his 70th birthday on Sunday when he received an urgent phone call.
The voice on the other end asked Roscoe if he would serve as an eleventh-hour mediator in the massive defamation lawsuit filed by Dominion Voting Systems against Fox News. The start of the trial was hours away, and Dominion planned to force Rupert Murdoch and Tucker Carlson onto the witness stand soon after opening statements, according to people familiar with the matter.
As Roscoe sailed aboard the cruise ship, he didn’t hesitate to accept the unexpected task of brokering a deal to avoid the media law trial of the century.
“I said yes,” Roscoe told CNN on Wednesday, recalling advice his father gave him at the age of 16 about accepting work assignments while on vacation. “My dad told me that if someone needs you, they call you, and if they need you, you go.”
The lead trial attorneys – Justin Nelson for Dominion and Dan Webb for Fox – had negotiated for a settlement over the weekend before Roscoe was brought in, but they were “really far apart” and no deal materialized, one of the people familiar with the matter told CNN.
Over the next day, Roscoe familiarized himself with the historic defamation case, poring over thousands of pages of documents. Then there was intensive “shuttle diplomacy,” with Roscoe oscillating between the two sides, before eventual phone calls and Zoom meetings with everyone together.
Late on Sunday night, Delaware Superior Court Judge Eric Davis was notified that the parties hired Roscoe, a mediator at JAMS. Davis soon announced a surprise one-day delay to the trial’s commencement to give the mediator a shot at clinching a deal – though he didn’t seem interested in granting any additional delays beyond that.
On Monday, the frantic negotiations got underway.
In the whirlwind 24 hours that followed, the talks culminated in a historic deal, which was hammered out shortly after 2 p.m. ET Tuesday, averting what would have been a high-wattage trial that would have forced the right-wing talk network to reckon further with the election lies it aired in the wake of the 2020 presidential contest.
“It went down to the wire,” Roscoe acknowledged to CNN.
In addition to speaking to Roscoe, CNN also spoke to multiple people with direct knowledge of the events leading up to the $787.5 million out-of-court deal, the largest publicly known settlement ever for a U.S. defamation case against a media outlet. As part of the agreement, Fox also “acknowledged” the court’s finding that it repeatedly aired false claims about Dominion – but notably, Fox wasn’t required to issue an on-air correction or retraction.
In the lead up to the last-second deal, attorneys for both Fox News and Dominion were fully expecting a trial.
Last week, Dominion had notified Fox News that one of its first witnesses would be Rupert Murdoch, the 92-year-old Fox Corporation chairman, a person familiar with the matter told CNN. Tucker Carlson, the extremist who hosts Fox News’ 8 p.m. hour, was one of the first people that Dominion planned to put on the witness stand in Wilmington, Delaware.
And after the jury was sworn in Tuesday morning, all signs pointed to trial happening as planned. Dominion lawyer Stephen Shackelford was seen eating at the Subway restaurant in the courthouse’s basement cafeteria during the lunch break, immediately before he was set to deliver opening statements. Members of the newly empaneled jury ate their first – and only – court-provided lunch as well. Meanwhile, on the other side of the world, Roscoe was finalizing the deal that ultimately averted the six-week trial.
“Presence in the courtroom often tends to crystalize the focus of the risks and benefits of litigation,” Roscoe told CNN. “Once the jury sits down and you’re looking at people who are going to decide your fate, it’s an awakening experience.”
Buzz of a settlement reached new heights on Tuesday afternoon, after the opening statements that were scheduled for 1:30 p.m. were inexplicably delayed, and the jury wasn’t brought back into the courtroom as planned.
After the deal was finalized in the 2 p.m. hour, lawyers quickly drew up the paperwork, which was signed moments before Davis entered the courtroom just before 4 p.m., people familiar with the matter said.
Davis then announced that a resolution had been reached, astonishing observers and eliciting audible gasps from reporters inside the courthouse. He then dismissed the jury – and the case was over.
A deal wasn’t easy to reach. Roscoe, a world-renowned mediator who has even resolved wartime disputes in the Balkans, told CNN that it was among the toughest assignments he has ever faced.
“It was one of the more challenging cases because of the magnitude of the dispute and the visibility,” he said, adding, “I would not characterize any aspect of this mediation as easy.”
by tyler | Apr 18, 2023 | CNN, media
Netflix is officially winding down the business that helped make it a household name.
This fall, the streaming giant will officially say goodbye to its DVD rental service and all of the red envelopes that made it possible.
“On September 29th, 2023, we will send out the last red envelope,” the company tweeted Tuesday. “It has been a true pleasure and honor to deliver movie nights to our wonderful members for 25 years.”
“Our goal has always been to provide the best service for our members, but as the DVD business continues to shrink, that’s going to become increasingly difficult,” co-CEO Ted Sarandos wrote in a blog post Tuesday. “Making 2023 our Final Season allows us to maintain our quality of service through the last day and go out on a high note.”
The company reported a miss for its second-quarter earnings after market close on Tuesday. Shares fell by around 6%.
by tyler | Apr 18, 2023 | CNN, media
A last-second settlement has been reached in the historic defamation case between Fox News and Dominion Voting Systems, the parties announced Tuesday in court.
“The parties have resolved their case,” Superior Court Judge Eric Davis said.
“Your presence here… was extremely important. And without you, the parties would not have been able to resolve their situation,” the judge told the jurors, before dismissing them.
The settlement between Fox News and Dominion Voting Systems totals $787,500,000, according to Dominion attorney Justin Nelson.
The settlement represents “vindication and accountability,” Nelson said in a press conference Tuesday afternoon.
“We are pleased to have reached a settlement of our dispute with Dominion Voting Systems,” Fox News said in a statement. “We acknowledge the Court’s rulings finding certain claims about Dominion to be false. This settlement reflects FOX’s continued commitment to the highest journalistic standards. We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues.”
“Fox has admitted to telling lies about Dominion that caused enormous damage to my company, our employees, and the customers that we serve,” John Poulos, the CEO of Dominion Voting Systems, said at a press conference Tuesday afternoon. “Nothing can ever make up for that.”
“I cannot thank the election officials that we serve enough. Without them, there is no democracy,” he added.
The settlement was apparently brokered while the trial was on the brink of opening statements in Wilmington, Delaware. After swearing in the jury earlier Tuesday, an unexplained hours-long delay paused proceedings in court, which yet again triggered rampant speculation that a deal was quietly in the works.
The last-minute deal means the closely watched case is effectively over and won’t proceed to trial. By settling with Dominion, influential Fox News executives and prominent on-air personalities will be spared from testifying about their 2020 election coverage, which was filled with lies about voter fraud.
In its lawsuit, Dominion sought $1.6 billion in damages from Fox News. The right-wing network argued vociferously in pretrial proceedings that this number was inflated and didn’t come close to accurately capturing the potential losses that Dominion could have suffered as a result of Fox’s 2020 broadcasts.
Fox News and Fox Corporation – its parent company, which was also a defendant – say they never defamed Dominion, and say the case is a meritless assault on press freedoms. They denied Dominion’s claim that they promoted these election conspiracies to save their falling ratings after the 2020 election.
While the Dominion case is now over, Fox News is still facing a second major defamation lawsuit from Smartmatic, another voting technology company that was smeared on Fox shows after the 2020 election. That case is still in the discovery process, and a trial isn’t expected anytime soon.
Dominion Voting Systems still has pending lawsuits against right-wing networks Newsmax and OAN, as well as against Trump allies Rudy Giuliani, Sidney Powell and Mike Lindell.
All of these parties and entities deny wrongdoing and are fighting the lawsuits.
by tyler | Apr 18, 2023 | CNN, media
Netflix on Tuesday posted weaker-than-expected subscriber growth for the first three months of this year, causing its stock to fall as much as 8% in after-hours trading before rebounding somewhat.
The company reported a net increase of 1.75 million global streaming subscribers, up nearly 5% from the same period in the prior year, but below the more than 3 million Wall Street analysts had expected.
The disappointing subscriber growth came as Netflix delayed its plan to crack down on password sharing. Netflix had said last quarter that it would roll out paid sharing — a charge for having multiple users on a single account — at the start of this year, but said Tuesday that it decided to delay the broad launch until the second quarter.
“While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a better outcome for both our members and our business,” the company said in its shareholder letter.
Tuesday’s earnings report marks the first for new co-CEOs Greg Peters and Ted Sarandos, after founder Reed Hastings handed over the role and became executive chairman in January.
It was a crucial quarter for Netflix, as the company seeks to grow a number of new revenue opportunities following rocky performance last year, including shedding 200,000 subscribers in the year-ago quarter, which sparked a major selloff.
Netflix
(NFLX) reported revenue of around $8.2 billion for the quarter, up nearly 4% from the same period in the prior year and in line with analysts’ projections. The company’s quarterly income fell 18% to $1.3 billion.
The report comes days after Netflix bungled what was supposed to be its second-ever live show — the season 4 “Love is Blind” reunion — and had to apologize to frustrated fans and tape the special for streaming. Unlike its streaming rivals, Netflix had long been resistant to live streaming because of its high costs. But, facing steeper competition, Netflix has started to experiment with the format, one it apparently has not yet perfected.
