Is Buzzfeed A Tech Company?
So why on earth is Andreessen Horowitz investing in a media company? Or is Dixon right – is BuzzFeed really a technological company that can use software to succeed in everything from listicles to hard news to now, their own movie production company? What has changed since Andreessen wrote in his post introducing Andreessen Horowitz:
We are almost certainly not an appropriate investor for any of the following domains: “clean”, “green”, energy, transportation, life sciences (biotech, drug design, medical devices), nanotech,movie production companies, consumer retail, electric cars, rocket ships, space elevators. We do not have the first clue about any of these fields.
I suspect what Andreessen and company have come to realize in the five years since that post was written is that because of the Internet media is more like technology than it might first appear, and that what Andreessen Horowitz cares about is not the software but the potential scale.
- Like software, media has zero marginal cost
- Multiple new business models have emerged for media, such as attracting massive user bases for free which can then be monetized through advertising or premium services
- The addressable market for media is the connected population of the world, and content is itself self-selecting when it comes to effective targeting
These are all points that are overlooked by those in the media kvetching about the death of journalism: everything that is hurting traditional media companies – zero marginal costs, “free” expectations, unlimited competition because of global distribution – are opportunities for new media companies unencumbered by traditional thinking.
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