By James DeRuvo (doddleNEWS)
When CNN paid YouTube star Casey Neistat $25 Million for his Beme social video app, the idea behind it was to mine Neistat’s huge audience for citizen led journalism and digital streaming content. But as time went on, it has become clear that the Network wasn’t sure how to make the most of their Golden Boy and his social video streaming app. Last week was the beginning of the end, as Neistat announced on his YouTube Channel he was leaving CNN. And now, their digital studio looks to be part of that shakeup.
“We’ve been transparent about our strategy,” a CNN spokesman said. “In order to innovate, grow and experiment, we’ve added more than 200 jobs in the past 18 months. Not every new project has paid off so we will stop some activities in order to reallocate those resources and enable future experimentation. Organizations that do not make big bets and continuously evolve are the ones that fail.”
Citing “internal financial targets that were overly aggressive,” CNN announced a restructuring plan that included eliminating 50 jobs in their digital news division, the lion’s share of which affected video production, programming and product development. All digital departments will be consolidated, in order to avoid overlap, and the Beme app was shut down as of January 25th. CNN is also direct oversight of CNNMoney and CNNPolitics to CNNDigital editor in chief Meredith Artley.
CNN doesn’t specify if all Beme employees were given the axe in this round of layoffs, and even Neistat assured fans that Beme was continuing without him. But then a week later, CNN began dropping the axe. I know of one employee who was laid off last week and decided to go on his own odyssey, taking an RV across the country to Los Angeles in order to launch his own YouTube Channel.
This is nothing new in the acquisition game. Sometimes you buy a company because you want to get into that market, other times you buy a company to eliminate the competition. And sometimes, even if you’re trying to get into a specific market, you may not understand just what you’re getting when you buy it, and that seems to be what CNN was faced with. CNN News Chief Jeff Zucker seemed to say he became interested in what Beme was doing because of his kids.
Consequently, CNN’s digital network isn’t the only company faced with a shake out, as both BuzzFeed and Vice have also gone though a round of layoffs in their digital news divisions. So what’s going on? Well, while smaller channels like Beme, BuzzFeed and Vice are faced with reworking their business plans and laying off staff, Google and Facebook are expanding thanks to their incredible social media reach. YouTube has surpassed nearly 1.5 billion regular daily users, and Facebook is spending over a Billion in the next few years on original programming. Even Viacom sees profit to be made, otherwise they wouldn’t have bought Vidcon from the Green Brothers.
With one bad news story after another, it’s coming clear that the digital marketplace is undergoing a shakeup. As seen in YouTube’s “adpocalypse,” as advertisers are getting more picky as to what content their ads appear on. YouTube has even taken the move of giving them approval over that very issue.
At the end of the day, while attempting to give the digital news division a hipster makeover, CNN simply figure out how to make it work financially with an ever changing online ad market. What’s next for streaming video? Well, in uncertain times, advertisers tend to go back to safe bets. So while they may not abandon the streaming marketplace completely, they will prefer bigger names and more restrictive content. Uncertain times are here for content creators, and the better they are at controlling access to their own audience, the better off they’ll be.