The Washington Post Media Reporter Elahe Izadi discusses the ever-changing digital media landscape as Tucker Carlson agrees to a deal with Elon Musk to air his show on Twitter after his departure from Fox News, and break down how the rise of AI generated content at BuzzFeed is impacting the future of digital advertising.
Video Transcript
SEANA SMITH: Well, BuzzFeed reporting a first quarter net loss, $36.6 million. The company recently announcing that it's slashing its workforce and shutting down its news division. Now, this follows results from Fox, which reported a $50 million loss in the third quarter tied to expenses relating to its settlement with Dominion.
With so much happening in the media world, we want to bring in "Washington Post" media reporter Elahe Izadi. Elahe, it's great to see you again here. So, of course, let's start with Fox because it's the first public comments that we've got in from Lachlan Murdoch since the settlement with Dominion, also since the firing of Tucker Carlson. What did you make of the results that we got today and what we heard from Murdoch?
ELAHE IZADI: Yeah, a few things. One, Tucker Carlson was not mentioned by name. But it's notable that since he's been fired, the ratings for Fox News at his hour have dropped dramatically. And today, Lachlan Murdoch made no indication that they're going to divert or change their editorial strategy. It seemed to be, if you read between the lines, that Carlson's firing represented a tweaking of a strategy but that there would be no departure from what Fox has done for many years and for some time.
The other thing that was notable was an acknowledgment that the settlement had a cost to the company and that, in this case, Lachlan Murdoch made mention that Fox was limited in what they could argue at trial and that he said something to the effect of we settled this to not drag this out.
But the very notable thing to me is what was said about another lawsuit that Fox News is facing against another voting technology company called Smartmatic. That is a $2.7 billion defamation lawsuit that we do not expect to go to trial, if it does make it to trial, until 2025.
And Lachlan Murdoch said something to the effect of, well, this case is fundamentally different. I'm not sure how different it is. We are going to see how that proceeds. But it is a different company. It's going to be a different state. It's going to unfold perhaps differently, but they're still a ways out.
And then the other thing that's notable is that Fox also is facing several shareholder lawsuits for how the company handled the lawsuit from Dominion Voting Systems, which ended with a settlement of $770-- $778.5 million, about half of what was there. But the company did incur a loss. The $50 million loss, net loss in this quarter, if you compare it to the same period last year, same period last year they posted over $200 million gain for that period.
SEANA SMITH: Yeah, Elahe, did you get a sense that Fox is just trying to leave all of these issues in the past because it didn't seem like they wanted to address the severity of the events that have taken place over the last several months pertaining specifically to the Dominion lawsuit, also to what we heard from Tucker Carlson, the decision to fire him. And then Smartmatic, it seemed like they almost just wanted to dismiss the risks that that would potentially pose here to shareholders given the sheer size of it.
ELAHE IZADI: Yeah, I think the argument here and from when this news of the settlement came out and Fox put out a statement was that they want to put this behind them. They don't want this to drag on and that it serves in everyone's best interest to just end this matter and move on. They're still fighting in court over redactions being unveiled because there's still some things that we-- even though so much was made public during the Dominion legal fight through discovery that there were still some of these private internal communications that were redacted.
And Fox has argued that a settlement took place precisely so that this matter could be ended and move on. And, yeah, I'm projecting a sense of the company is in good shape. Revenue did go up by 18%. It did post a loss, obviously, due to these legal fights but that the argument here is that it was in the best interests of the company financially going forward to settle and not to worry about the Smartmatic case.
SEANA SMITH: Elahe, what's your sense of the sluggish ad market because there have been some hope that we would start to see a recovery? I think when you take a look at some of the tech giants that reported several weeks ago, they had shown some signs that things were improving. Yet when you take a look at some of these media companies, it doesn't seem like that's exactly translated here to some of the traditional media players. Is that in line with what you're seeing? And I guess, what does that tell us just about the next several months?
ELAHE IZADI: In every memo about company-wide layoffs from digital startups to legacy media companies, there has made mention of a soft ad market and that this is something that media companies are still grappling with. I don't know if it's so much as the reality on the ground or concerns and to forecasting of what's around the corner and having to mitigate for that. And also, it's important to note that for a lot of companies, it's the ad market, but it's also audience numbers and that if the market-- if you have a lot of audience but the ad market is soft, it doesn't matter how many people are viewing your content if the ad market is soft. And so there's a calculation going into there.
But, yes, I still think this is a concern at many media companies that the ad market is still soft and that ad revenue has gone down. During the pandemic, in the beginning, we did see a lot more audience numbers, that audience numbers went up for a lot of journalism and a lot of news content. The ad-- the ad market was soft. And I still think that there is this concern right now with uncertainty in the economy and I read in every single layoff memo that comes across my desk.
SEANA SMITH: And when you take a look at some of the trends that are going on within the media space, a lot of these disruptors, it seems like, is having a hard time competing with the more traditional players within the media. Take a look at what's happening to Vice, the fact that BuzzFeed shut down its news division. What do you think this signals just about the future media landscape and what that's going to look like?
ELAHE IZADI: Yeah, it's interesting if we look at specifically Vice and BuzzFeed. I would say they're in one of the earlier iterations of disruptors because a lot of the practices that especially BuzzFeed engaged in, outlets like "The New York Times" and "The Washington Post" started adopting those practices or poaching their reporters and doing listicles and that sort of thing. And that was in the 2010s. And I think in those cases what you saw was a lot of venture capital invested into-- and a lot of funding into these companies, and they couldn't expand fast enough to meet that investment.
But at the same time, as we were seeing Vice probably heading into bankruptcy, BuzzFeed News shutting down and BuzzFeed trying to figure out how to get on firmer financial footing, we still see new digital media outlets getting into the space, raising capital. The Messenger is about to start with 150 employees. They already acquired another venture startup, Grid News, and shut that down.
And so I always say whenever you have a space like media where there is a lot of volatility and people trying to figure out how to make this business model work or what can work, you're always going to have experimentation. And within that experimentation, there will be failures.
SEANA SMITH: And as we were talking here in just the last couple of minutes, Tucker Carlson actually just tweeted out we're back and that he's taking his show to Twitter, reaching a deal with Elon Musk. What do you think of that?
ELAHE IZADI: Yeah, I think they had some conversations, reportedly. And Twitter and Elon Musk, that's a whole other-- that's a whole other conversation, right, and how disruptive that can be. But, you know, in that, there is always this sort of existential question with Fox whether these really popular personalities on Fox are popular because they're on Fox or they bring viewers to Fox.
Now, we see in the past week or two since Tucker Carlson has been fired and is no longer in that time slot, the ratings have dropped dramatically. Fox could promote a new personality in and put them and they could be successful in that time slot. And I think that's going to be something to watch. Will Tucker Carlson be able to get as much prominence, as much influence, and as many viewers on Twitter as he did on Fox? Who makes who powerful?
SEANA SMITH: That is a very, very good point because we know in the past that that hasn't exactly happened, that Fox News viewers stay very loyal to Fox News rather than following the big personalities there. Elahe Izadi, thanks so much for joining us. Really appreciate it.
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