Why BuzzFeed’s Future May Depend On The Pivot To NFTs And The Metaverse

So what’s next for a digital media company that’s cutting back on its press staff and struggling to gain a foothold in the supposedly more lucrative e-commerce space? In order to continue positioning itself as a profitable tech player, several experts told TheWrap that BuzzFeed should look for opportunities in Web3, the next wave of blockchain-based internet supporting cutting-edge technologies such as NFTs and the Metaverse.

“It would be consistent with the tech story they sell to [Wall] Street,” Peter Csathy, president of media and technology consultancy CREATV Media, told TheWrap. “The trick is to convince the street that they are more than a media company with these numbers…and commerce is also the booming world of Web3.”

As the first digital media company to go public, BuzzFeed faces growing pressure to boost its profit margins — and traditional advertising and content revenue won’t be enough to convince investors. As it prepares for its IPO, BuzzFeed touted its potential for business growth, including with food brand Tasty and youth entertainment company Complex Networks. Each generates commissions on sales through content, events, apparel, and other merchandising.

“As a private company, BuzzFeed could attempt any new revenue growth strategy with little fanfare outside of the organization,” said Paul Roberts, founder and CEO of digital advertising company Kubient. “As a newly listed company, there’s tremendous pressure to not only share your roadmap, but to execute that roadmap.”

One possible revenue stream would be non-fungible tokens (NFTs), those collectible pieces of blockchain that everyone from Hollywood studios to up-and-coming artists have turned into the Next Big Thing. Legacy publishers from The New York Times to The Associated Press sold NFTs of their articles and photography for six-figure sums. Some digital artists have made tens of millions auction of their work. BuzzFeed could ostensibly get in on the game with its brands or content to create digital goods that could be used in the Metaverse, an immersive virtual reality world.

“It could definitely be… a limited edition NFT Gucci bag, or it could allow a celebrity, whose content they are covering, to provide an NFT opportunity to their audience, [like a new song, visual or experience]said Csathy.

NFTs could also allow BuzzFeed to return to its roots. Memes, quizzes and viral content, ingrained in the DNA of BuzzFeed in its heyday, lend themselves particularly well to this digital economy.

“They could create an imprint [in NFTs] with entertainment,” said Quynh Mai, CEO of marketing firm Moving Image and Content. “The core of their content business is pop culture driven, unlike Hearst or Condé Nast.”

Developing more Web3 products could help BuzzFeed appeal to a younger demographic. While millennial entertainment is what made BuzzFeed BuzzFeed, companies are now targeting Gen Z even younger. Based on a study 2021 by betting on the Gamblers Pick app, Gen Z are more likely than other generations to be influenced by platforms like Reddit and Twitter to invest in crypto, memes and NFTs rather than traditional assets.

In his first earnings call, Founder and CEO Jonah Peretti hinted at future investments in the Metaverse even as he blamed Facebook for lagging business revenue. “As we unite the Complex Networks, HuffPost, and BuzzFeed teams, we see new opportunities to deepen our business relationships with our audiences and partners, expand into new categories, and influence shopping behavior to drive growth of this business over time,” Peretti said. On call. “And as our platform partners are making significant investments in building the metaverse, we are well positioned to capture our share of this opportunity.”

A representative for BuzzFeed declined to comment further for this story.

Of course, BuzzFeed isn’t alone in its e-commerce struggles, as the space becomes increasingly saturated and consumers buy directly through social media or slow down their spending due to inflation.

“Trade will only become more competitive for publishers when the world emerges from a COVID-induced buying frenzy for a more fiscally conservative time,” Roberts said.

If BuzzFeed pursues Web3 products, it will likely need to partner and leverage its various brands to build a business, said Doron Gerstel, CEO of global advertising firm Perion. “They’ll need partnerships with people like OpenSea and Nifty, who have already carved out huge chunks of the ecosystem,” Gerstel said. “There are certainly revenues to be had, but they don’t have the free cash flow of some media giants who are already claiming their rights. So they need a strategy focused on BuzzFeed. »

Another route would be for BuzzFeed to acquire companies with experience in these sectors, from tech platforms to crypto companies, to further establish itself as a tech-focused company. Over the past decade, BuzzFeed purchases have included data company Kingfish Labs, consumer web company Torando Labs, cloud platform GoPop and news site HuffPost.

“Media companies don’t have a good understanding of NFTs yet,” Csathy said. “Looking outside the box of commerce is really what will get them into the promised land.”