Digital media companies are suddenly worried about declining ad revenue, and the venture capitalists funding these companies have also turned off the faucet of cash as they realize that success stories like BuzzFeed and Mashable are not the unicorns everyone thought they were.
Instead, the big winners have been the technology companies like Google and Facebook that have suckled ad revenue away from content companies and now account for 85 cents of every dollar spent in online advertising.
Nicole Cliffe, Editor and Co-Founder of The Toast, responded on Twitter by pointing out that while traffic is up, revenue has fallen, even with a redesign intended to attract higher paying advertisers.
We are certainly not immune. Traffic is as good or better than six months ago, revenues lower. https://t.co/miDDJyeoHU
— Nicole Cliffe (@Nicole_Cliffe) April 18, 2016
The biggest losers have of course been writers who continue to see their pay decline. Lincoln Michel of Electric Literature added that the problem for publishers is a double-edged sword. Readers complain about advertising or paywalls, but also complain when writers aren’t paid:
— Lincoln Michel (@TheLincoln) April 18, 2016
There might still be hope. Online publishers have seen their staffs begin to unionize with websites like Gawker and VICE adopting union contracts while other properties like Huffington Post are negotiating. Unions have meant pay increases, but whether this is sustainable as ad revenues decline and venture capital disappears remains to be seen.