Media
When everything is digital, why we long for media we can hold in our hands – CBC.ca
Struan Sutherland is a self-described “movie guy.”
He started collecting movies on VHS as a teenager. Now, as an adult, he collects DVDs — and estimates that he owns about 500 of them. He’d own quite a few more, he says, except that he sells or gives away some movies he no longer likes.
“I’ve always liked the idea of owning the movies I like; the ones that I want to watch over and over again,” said Sutherland, 40, from his home in Halifax.
“Things come and go from streaming, so it’s nicer to just own the movies that you sort of identify most with.”
It’s a feeling increasingly shared by consumers and collectors across Canada. After years of digitizing everything, people are rediscovering the value of physical assets. DVDs, vinyl records and film cameras are all experiencing a renaissance. Even cassette tapes are making a comeback.
Last year, for the second year in a row, vinyl albums outsold CD albums in the in the U.S., Rolling Stone reported in January (and the manufacturers are struggling to keep pace with the growth). In terms of photography, Kodak said in 2022 that it “can’t keep up” with the demand for film.
And while DVD sales have been in decline for a decade, Richard Lachman, an associate professor in the RTA School of Media at Toronto Metropolitan University, notes that they’re now declining “more slowly.”
There are a number of factors that could be contributing to the resurgence of physical media, from disenchantment with streaming services to longing for a physical (as opposed to virtual) object, said Lachman.
“More people are spending a lot more time consuming media at home. And they’re building rooms, or are collecting in some way. And DVDs are physical objects. They look nice in a room,” Lachman said.
“The physicality of it is part of the joy you’re getting from the fandom.”
‘I’m the algorithm’
In an old limestone building in Kingston, Ont., tucked between a brew pub and a hotel parking garage, is a DVD rental store that has managed to survive while so many others across the country haven’t.
Chain stores Blockbuster and Rogers Video shuttered in the mid-2010s, for instance, as customers moved to streaming and video-on-demand services. And in its 2022 report on Canada’s DVD, game and video rental market, industry research company IBISWorld noted that profits have decreased 11.8 per cent since 2017.
“The industry is in a state of severe and prolonged decline,” the report said.
But Classic Video boasts more than 50,000 DVDs and Blu-rays, and a loyal customer base that has been strolling into the shop just off the downtown waterfront for more than 35 years.
Tom Ivison, owner of Classic Video in Kingston, Ont., explains that even though business has been tough, customers continue to come in to find titles they can’t get on streaming services.
While he admits it’s been a challenge, owner Tom Ivison says he believes Classic Video has stayed in business because of the inventory that his customers can’t find on streaming services. For instance, he says, the most popular sections (after new releases, of course), are the British section and the horror section.
“There’s a lot of product here not available online. And there aren’t many other avenues to access that programming, and that definitely brings in people,” Ivison said.
Standing at the store’s front desk, which he calls the nucleus of the shop, Ivison says there’s something else his shop offers that streaming doesn’t: a human being.
“In a weird way, I’m the algorithm here at the store,” he said.
“Using a streaming service, it’s more data collection in terms of what someone may watch. I have to know my customers and have a sense of what they may want to watch or not want to watch. That’s important.”
Lachman noted that we’re currently in a “much more chaotic” streaming marketplace than even just a few years ago. Between Netflix, Apple TV+, Crave, Hulu and Disney+ (just to name a few), there’s more choice, more costs and more complexity.
“You might have two seasons on one streaming platform, two seasons on another streaming platform, and then they disappear in a year when the rights agreements change,” Lachman said.
“So if you’re a fan of that series, you buy it.”
Vinyl can barely keep up with demand
As for vinyl, demand for records has been growing in double-digits for more than a decade, the Associated Press reported last year. As a result, dozens of record-pressing factories have been built to try to meet demand in North America — and it’s still not enough.
Now, as a younger generation buys turntables, some recording artists like Adele, Ariana Grande, Taylor Swift and Harry Styles have been moving to vinyl. Some have even accused Adele of causing the vinyl manufacturing delays when she released her album 30 to vinyl in 2021, although industry experts noted at the time that the problems plaguing the pressing industry were not new.
In Toronto, Jeff Barber, the owner of music shop Sonic Boom, notes that while the resurgence of vinyl isn’t necessarily new, the pandemic took it to another level.
“We started selling more and more turntables, speakers, and in line with that, a heck of a lot more records,” Barber said.
Since then, the store’s clientele has become much more diverse, he said, with a lot of younger female customers buying records. Now, it’s common to have 15-year olds coming in to buy everything from old re-issues to new releases, Barber said.
To illustrate that eclectic mix, the store’s top sellers last year included American rappers Tyler, the Creator and Kendrick Lamar, Fleetwood Mac’s classic 1977 album Rumours, and of course, Taylor Swift.
He credits nostalgia (for the older buyers) and perhaps a technological backlash (for the younger buyers) for vinyl’s popularity. And it’s not just vinyl, he said, but CDs are popular again, too, and it doesn’t stop there.
“We can barely keep cassettes in stock,” Barber said. “They sell like crazy.”
LISTEN | Inside Montreal’s ‘The Death of Vinyl’ record store:
Daybreak Montreal7:44Making Montreal: How ‘The Death of Vinyl’ is bringing record collecting back
It’s time for another edition of our new arts and culture series, Making Montreal. Daybreak’s Rebecca Ugolini visited The Death of Vinyl record shop on Saint-Laurent Boulevard, near Little Italy.
He notes that some of his younger customers just want physical mementos of the artists they enjoy — something they can buy, hold in their hands, and collect. Records, CDs and cassette tapes fit that bill.
And while it’s fun to listen to music, it’s not necessarily fun to stream it, Barber added. But going home and putting a record on the turntable is not only fun, he said, it’s also ritualistic.
“There’s something about the process that engages you with the music more.”
#FilmCamera
Perhaps ironically, a large driver of the interest in another form of physical media comes from social media. #FilmCamera has 731.9 million views on TikTok, and #35mm has 785 million views.
Many of the videos posted compare photos taken on an iPhone with photos taken on film, with the latter showing more stylistic, nostalgic-looking shots. One video with more than two million views simply compares two shots taken off the side of a boat.
Another six-second video with more than 441,600 views shows a young, female photographer taking a picture of film using her film camera.
Lackman says it’s a combination of nostalgia and style that’s driving film’s popularity with a younger generation. On Instagram, where there are 12.4 million #FilmCamera posts; people post images of everything from ice cream stands and moody beaches to their pets and parties.
“Film is more fun,” one young user wrote on Instagram in a post where she is promoting a pair of sunglasses.
Using film also just gives a sense of being really into something; of going the extra mile, Lachman said.
“Digital photography is so effortless, so easy, so surrounding you, that being able to pause and take time for something becomes something that gives pleasure. It gives joy.”
GitHub removed code shared without permission after request by social media giant, court filing says.
Twitter’s source code has partially leaked online, according to a legal filing by the social media giant.
Twitter asked GitHub, an online software development platform, to remove the code after it was posted online without permission earlier this month, the legal document filed in the US state of California showed on Sunday.
GitHub complied with Twitter’s request to remove the code after the social media company on March 24 issued a subpoena to identify a user known as “FreeSpeechEnthusiast”, according to the filing with the US District Court of the Northern District of California. San Francisco-based Twitter noted in the filing that the postings infringe on the platform’s intellectual property rights.
The filing was first reported by The New York Times.
The leak of the code is the latest hiccup at the social media giant since its purchase by Elon Musk, whose tenure has been marked by mass layoffs, outages, sweeping changes to content moderation and heated debate about the proper balance between free speech and online safety.
Musk, who bought Twitter for $44bn last October, said recently that Twitter would open the source code used to recommend tweets on March 31. Musk, who also runs Tesla and several other companies, said the platform’s algorithm was overly complex and predicted people would find “many silly things” once the code was made public. It is not clear if the leaked source relates to the code used to recommend tweets.
“Providing code transparency will be incredibly embarrassing at first, but it should lead to rapid improvement in recommendation quality,” he wrote on Twitter. “Most importantly, we hope to earn your trust.”
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Getty ImagesUtah has become the first US state to require social media firms get parental consent for children to use their apps and verify users are at least 18.
The governor said he signed the two sweeping measures to protect young people in the state.
The bills will give parents full access to their children’s online accounts, including posts and private messages.
The move comes amidst heightened concern over the impact of social media on children’s mental health.
Under the measures enacted on Thursday, a parent or guardian’s explicit consent will be needed before children can create accounts on apps such Instagram, Facebook and TikTok.
The bills also impose a social media curfew that blocks children’s access between 22:30 and 06:30, unless adjusted by their parents.
Under the legislation, social media companies will no longer be able to collect a child’s data or be targeted for advertising.
The two bills – which are also designed to make it easier to take legal action against social media companies – will take effect on March 1, 2024.
Governor Spencer Cox, a Republican, wrote on Twitter: “We’re no longer willing to let social media companies continue to harm the mental health of our youth.
“As leaders, and parents, we have a responsibility to protect our young people.”
Children’s advocacy group Commons Sense Media welcomed the governor’s move to curtail some of social media’s most addictive features, calling it a “huge victory for kids and families in Utah”.
“It adds momentum for other states to hold social media companies accountable to ensure kids across the country are protected online,” said Jim Steyer, Common Sense Media’s founder and CEO.
Similar regulations are being considered in four other Republican-led states – Arkansas, Texas, Ohio and Louisiana – and Democratic-led New Jersey.
But Common Sense Media and other advocacy groups warned some parts of the new legislation could put children at risk.
Ari Z Cohn, a free speech lawyer for TechFreedom, said the bill posed “significant free speech problems”.
“There are so many children who might be in abusive households,” he told the BBC, “who might be LGBT, who could be cut-off from social media entirely.”
In response, Meta, Facebook’s parent company, said it has robust tools to keep children safe.
A spokesperson told the BBC: “We’ve developed more than 30 tools to support teens and families, including tools that let parents and teens work together to limit the amount of time teens spend on Instagram, and age verification technology that helps teens have age-appropriate experiences.”
There has been other US bipartisan support for social media legislation aimed at protecting children.
President Joe Biden’s State of the Union address in February called for laws banning tech companies from collecting data on children.
Last year, California state lawmakers passed their own child data law. Among other measures, the California Age-Appropriate Design Code Act requires digital platforms to make the highest privacy features for under-18 users a default setting.
The passage of the Utah bills coincides with a bruising congressional hearing for TikTok CEO Shou Zi Chew.
Media
The digital media rollup dream is dead for the moment — now it’s all about core brand strength
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When a marriage or an engagement fails, it’s common for the participants to take time to work on themselves.
That’s where the digital media industry finds itself today.
After years of focusing on consolidating to better compete with Google and Facebook for digital advertising dollars, many of the most well-known digital media companies have abandoned consolidation efforts to concentrate on differentiation.
“What you’re finding is companies are trying to find a non-substitutable core,” said Jonathan Miller, the CEO of Integrated Media, which specializes in digital media investments. “The era of trying to put these companies together is over, and I don’t think it’s coming back.”
A 90% decline in BuzzFeed shares since the company went public in 2021, a failed sales process from Vice, the collapse of special purpose acquisition companies, and a choppy advertising market have made digital media executives rethink their companies’ futures. For the moment, executives have decided that more concentrated investment is better than attempts to gain scale.
“Right now, everyone’s trying to get through a tougher market by focusing on their strengths,” BuzzFeed CEO Jonah Peretti said in an interview with CNBC. “We’re in this period now where we should just focus on innovating for the future and building more efficient, stronger, better companies.”
What’s happening in the digital media space echoes trends from the biggest media companies, including Netflix, Disney and Warner Bros. Discovery. After losing nearly half their market values, or more, in 2022, those companies have emphasized what makes them different, whether it be distribution, brand or quality of programming, after years of global expansion and mega-mergers. Disney CEO Bob Iger said the word “brand” more than 25 times at a Morgan Stanley media conference this month.
“I think brands matter,” Iger said. “The more choice people have, the more important brands become because of what they convey to consumers.”
Making strategic decisions based on consumer demand rather than investor pressure is a pivot for the industry, said Bryan Goldberg, CEO of Bustle Digital Group, which has acquired and developed a number of brands and sites aimed at women, including Nylon, Scary Mommy, Romper and Elite Daily.
“Too many of the mergers were driven by investor needs as opposed to consumer needs,” Goldberg said in an interview.
The rollup dream’s rise and fall
From late 2018 to early 2022, the digital media industry had a shared goal. Pushed by venture capitalist and private equity investors who had made sizeable investments in the industry during the 2010s, companies such as BuzzFeed, Vice, Vox Media, Group Nine, and Bustle Digital Group, or BDG, were talking to each other, in various combinations, about merging to gain scale.
“If BuzzFeed and five of the other biggest companies were combined into a bigger digital media company, you would probably be able to get paid more money,” Peretti told The New York Times in November 2018, kicking off a multiyear effort to consolidate.
The rationale was twofold. First, digital media companies needed more scale to compete with Facebook and Google for digital advertising dollars. Adding sites and brands under one corporate umbrella would boost overall eyeballs for advertisers. Cost-cutting from M&A synergies was an added benefit for investors.
Second, longtime shareholders wanted to exit their investments. Large legacy media companies such as Disney and Comcast‘s NBCUniversal invested hundreds of millions in digital media in the early and mid-2010s. Disney invested more than $400 million in Vice. NBCUniversal put a similar amount into BuzzFeed. By the end of the decade, after seeing the value of those investments fall, legacy media companies made it clear to digital media executives that they weren’t interested in being acquirers.
With no strategic buyer available, merging with each other using publicly traded stock could give VC and PE shareholders a chance to cash out of investments that were well past the standard hold time of seven years. Digital media companies eyed special purpose acquisition companies — also known as SPACs or blank-check companies — as a way to go public quickly. The popularity of SPACs picked up steam in 2020 and peaked in 2021.
Deal flow accelerated. Vox acquired New York Magazine in September 2019. About a week later, Vice announced it had acquired Refinery29, a digital media company focused on younger women. BuzzFeed bought news aggregator and blog HuffPost in 2020 and then acquired digital publisher Complex Networks in 2021 as part of a SPAC transaction to go public. Vox and Group Nine agreed to a merger later that year.
BuzzFeed, generally thought by industry executives at the time to have the strongest balance sheet with the best growth narrative, successfully went public via SPAC in December 2021. Shares immediately tanked, falling 24% in their first week of trading. The coming weeks and months were even worse. BuzzFeed opened at $10 per share. The stock currently trades at about $1 — a 90% loss of value.
BuzzFeed’s underwhelming performance coincided with the implosion of the SPAC market in early 2022 as interest rates rose. Other companies that planned to follow BuzzFeed shut down their efforts to go public completely. Vice tried and failed. Now it’s trying for the second time in two years to find a buyer. BDG and Vox, meanwhile, abandoned considerations to go public. Vox instead sold a 20% stake in itself in February to Penske Media, which owns Rolling Stone and Variety.
The industry turns inward
Consolidation was always a flawed strategy because digital media could never become big enough to compete with Facebook and Google, said Integrated Media’s Miller.
“You have to have sufficient amount of scale to matter, but that’s not a winning formula by itself,” Miller said.
Vice’s deal for Refinery29 is a prime example of a deal motivated by scale that lacked consumer rationale, said BDG’s Goldberg.
“The digital media rollup has proven successful only when assets are thoughtfully combined with an eye toward consumers,” Goldberg said. “In what world did Vice and Refinery29 make sense in combination?”
Vice is engaged in sale talks with a number of buyers that fall outside the digital media landscape, CNBC previously reported. It’s also considering selling itself in pieces if there’s more interest in parts of the company, such as its TV production assets and its ad agency, Virtue.
Vice is a cautionary tale of what happens to a digital media company when its brand loses luster, Miller said. Valued at $5.7 billion in 2017, Vice is now considering selling itself for around $500 million, according to people familiar with the matter, who asked not to be named because the sale discussions are private.
A Vice spokesperson declined to comment.
“In the old days of media, with TV networks, if you were down, you could revive yourself with a hit,” said Miller. “In the internet age, everything is so easily substitutable. If Vice goes down, the audience just moves on to something else.”
Companies such as BuzzFeed, Vox and BDG are now trying to find an enduring relevancy amid a myriad of information and entertainment options. BuzzFeed has chosen to lean in to artificial intelligence, touting new AI-generated quizzes and other content that fuses the work of staff writers with AI databases.
BDG has chosen to primarily target female audiences across lifestyle categories.
Vox has focused on journalism and information across a number of different verticals. That’s a strategy that hasn’t really changed even as the market has turned against digital media, allowing Vox CEO Jim Bankoff the opportunity to continue to hunt for deals. Just don’t expect the partners to be Vice, BDG or BuzzFeed.
“We want to be the leading modern media company with the strongest portfolio of brands that serve their audiences on modern platforms — websites, podcasts, streaming services — while building franchises through multiple revenue streams,” Bankoff said. “There’s no doubt M&A is part of our playbook, and we expect it will continue to be in the future.”
Finding an exit
While executives may be making strategy decisions with a sharper eye toward the consumer, the problem of finding an exit for investors remains. Differentiation may open up the pool of potential buyers beyond the media industry. BuzzFeed’s emphasis on artificial intelligence could attract interest from technology platforms, for instance.
It’s also possible that there will be an eventual second wave of peer-to-peer mergers. While Integrated Media’s Miller doesn’t expect a future industry rollup, BuzzFeed’s Peretti hasn’t closed the door on the concept if market conditions improve. As executives invest in fewer ideas and verticals, the end result could be healthier companies that are more attractive merger partners, he said.
“If everyone invests in what they’re best at, if you put them back together, you’d have that diversified digital media company with real scale,” Peretti said. “That helps drive commerce for all parts of a unified company. I think it’s still possible.”
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
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