Union or No? The Digital Publisher Dilemma

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Back in 2015, BuzzFeed’s founder and CEO Jonah Peretti told his staff that he didn’t think unionization was a good idea for BuzzFeed. Cut to 2018; now he believes that a union of media companies may be what’s needed to counter the domination of the duopoly.

At first glance, both issues seem unrelated – but are they? Perhaps, Peretti felt that challenges could be best faced as a team i.e., in union.

Dissatisfaction + uncertainty = Creation of unions

This might be true of people working at larger digital publishers as well. Layoffs, missed revenue goals, and strategic changes have created a sense of dissatisfaction and uncertainty among employees. And this is reflected in the spate of unionization at these companies in the past few years. They include Vox Media, Thrillist, Huffington Post, Gawker Media (now Gizmodo Media Group), Vice Media, Salon Media, Mic, and ThinkProgress among others.

It’s been an enormous period of growth. At some point, and we’re getting pretty close, we’ll have sufficient density in the market where, simply to compete for employees, non-union companies will have to improve.
Lowell Peterson, Executive Director, Writers Guild of America, East.

The wave is not exactly surprising considering the changes taking place in media. When they started, digital entities sought to shake up the status quo in publishing. But while traffic soared, their profits often didn’t, leading to job cutbacks and financial uncertainty. Recent examples being Refinery29, which let go off more than 10% of its workforce, and the financially strapped digital news site Mic which was acquired by Bustle after laying off most of its staff.

“A way to take control”

Although a union can’t guarantee that workers will not be laid-off, it may give them some say in how a company goes about making changes. According to Kim Kelly, Editor at Vice Media’s Music and Culture section, Noisey, “People were fed up and broke and anxious about the future, and the union gave them a way to take control and force things to change.”

Apart from better pay and benefits which clearly play a major role in unionization, sources in several organized newsrooms contend that a lack of transparency around changes also spurred them to form unions.

NewsGuild President, Bernie Lunzer says, “People are trying to manage their futures. They have no illusions (that contraction of staff can be reversed), but they want to take control of what they can. There are massive disparities at some fast-growing digital empires. Top reporter/writers (are) making $80,000 to $90,000. But they may be sitting next to someone earning $45,000 and sleeping on their parents’ couch.”

Continued rough weather for digital publishers

The other side of the story is that many of these digital players are struggling to meet revenue goals. It was around a year back that things began looking shaky for some of publishing’s breathlessly-hyped digital unicorns. BuzzFeed and Vice were in the news for coming substantially short of their revenue targets, whilst Mashable was sold at a fraction of its valuation.

Things are not much better now, with Mic sold off to Bustle for $5m against a valuation of $100m. Vice is looking to trim its global workforce by 15% after having suffered losses of more than $50m this year and Refinery29 let go 10% of its staff this fall.

The whole media sector is under pressure unless you’re a FAANG (Facebook, Amazon, Apple, Netflix, Google) company. You can see that impact in all the big mergers that have been happening, but you also see it in companies that are scaling back or selling. Whether you’re a company that started in the past decade or a century ago, whether you’re funded by a billionaire or a V.C., you’re not immune to the changes in the industry, or the uncertainty that those changes bring.
Jim Bankoff, CEO, Vox Media

An expensive workforce

While unions are being created at these companies to ensure that employees get their fair share, the pie itself is getting smaller. Consequently, the management of these companies is generally concerned with the unionization trend because an organized workforce is a more expensive workforce. They also believe that unions make it harder for them to respond to changes in the business or reward top-performers, whilst simultaneously reducing productivity and creating discord that damages company culture.

Another problem is that having a unionized workforce makes a publisher less attractive in the market with respect to mergers and acquisitions. This is a big issue in an environment where many digital publishers are looking for buyers.

A unionized workforce almost always makes a company less attractive as an acquisition candidate.
Reed Phillips, Managing Partner at Oaklins DeSilva+Phillips

It’s often true that challenges can be faced better when people join forces. A union to take care of the interests of content creators and other employees at digital publishing houses may appear to be a good idea. But in the current environment, it could create more problems than solutions by creating opposing camps within an organization. Just like Peretti’s idea of a merger of media companies to fight the duopoly, it seems more idealistic than practical.

Download WNIP’s new Media Moments 2018 report, which dives deeper into 2018’s developments in publishing, and looks at what opportunities this year could usher in. The report is free and can be downloaded here.