Funny or Die, the prominent comedy and film company started by Will Ferrell in 2007, has made further reductions to its workforce after several years of job cuts. Funny or Die layoffs in 2018 have started to be implemented, while the precise number of jobs being cut is as-of-yet undisclosed.
The entire Funny or Die editorial team had been cut as a result of the most recent round of layoffs. One source said that about 30 Funny or Die jobs were cut, but that has yet to be officially confirmed by the company. Some of the affected staffers were offered other positions within the company.
The Funny or Die layoffs in 2018 come on the back of other deep cuts to the company’s workforce in the past few years. In 2016, about 30% of the company’s jobs were slashed, leaving the company with just under 100 workers. The company also shut down its San Mateo, California branch, which focused on app development.
Funny or Die is known for its digital shorts and other online content, but it has since branched out into films and television series. The company scored major hits with shorts like Between Two Ferns, which hosted a variety of celebrities and major political figures like Barack Obama and Hillary Clinton.
The company’s success in terms of viewership was not able to sustain the company financially, however, as evidenced by the job cuts.
CEO Mike Farah wrote a memo that detailed the thought process behind the Funny or Die job cuts; Farah blamed market conditions.
The digital media market landscape has changed in recent years. While in the past it was a sector of immense growth, with companies like Funny or Die and BuzzFeed, Inc. capitalizing on the growing number of online viewers eager for content, it has since slowed. The Funny or Die editorial team layoffs are just another example of digital organizations struggling to adapt to the slowdown.
The massive growth spurts in the industry led to expansion and development, but the slowing of that growth—combined with overspending during the boom times—led to many companies pulling back via layoffs and a reduction of services. The Funny or Die layoffs in 2018 likely fall under that category.
“There’s no good way to deliver news like this,” wrote Farah. “The simple fact is that today we have to let go of some great people at Funny Or Die, and it sucks. These people are incredibly smart and talented, and they’ve represented the best of us and our creative spirit.”
He continued, “Unfortunately, however, like a lot of other digital media companies, we’re facing tough challenges that we can no longer ignore, and so we must adapt.”
Facebook and Google Making Digital Media Market Tough
The Funny or Die layoffs in 2018 are a sign of a digital media market that has become increasingly difficult to operate in. Some are pointing to the Google-Facebook duopoly as creating a difficult environment. Facebook Inc (NASDAQ:FB) and Google, otherwise known as Alphabet Inc (NASDAQ:GOOG), were expected to account for a combined 63.1% of U.S. digital ad investment in 2017.
“Advertisers are increasingly demanding more granularity in targeting capabilities to reach consumers,” said Monica Peart, eMarketer Inc’s senior director of forecasting.
Peart continued, “Google and Facebook have positioned themselves at the front of this demand curve by being the ad publishers with some of the best-in-class targeting abilities in the digital ad market. With Facebook being able to provide targeting based upon consumer interests and Google capitalizing on where those consumers have been through searches, both companies ensure their lead among digital ad publishers.”
And the numbers are staggering. Google (including “YouTube”) earned approximately $35.0 billion in total digital ad dollars in the U.S., which was up by 18.9% from the previous year. Google’s total share of the U.S. digital ad market reached 42.2%. Facebook’s share of the digital advertising market, meanwhile, hit 20.9% in 2017, after the company’s digital revenues in the U.S. were slated to grow 40.4%.
In the U.S., no other digital ad platform has a market share above five percent. Digital media ad spending, therefore, has little choice but to go through one or both of the members of this particular duopoly if they want to hit as many viewers as possible.
As a result, Facebook and Google occupy a position of immense power over the market, with the ability to control prices and outreach. That power was even challenged last summer, when Google was slapped with a $2.7-billion fine from the European Union (EU) for antitrust violations.
The EU has a more powerful antitrust bureau than do North American countries, meaning that the duopoly’s ability to operate unimpeded will likely continue, making it difficult for smaller digital media companies to expand.
“Digital advertising will soon be approaching a point of saturation, indicating that there are limits to growth which may not be fully accounted for by the investment community,” said Brian Wieser, senior analyst at Pivotal Research Inc.
The concern, therefore, is that there are too few new consumers to reach while the two gatekeepers, Facebook and Google, are able to set prices and control the market through their dominant positions. The Funny or Die layoffs in 2018 represent another hit in a market that is already trying to contend with a slowdown in ad revenue while the duopoly controls the terms of online advertising.
“Funny Or Die Sets New Round Of Layoffs,” Deadline, January 23, 2018.
“Funny Or Die Lays Off Employees Amid Digital Sector Crunch,” Variety, January 23, 2018.
“Funny Or Die Has Laid Off Its Entire Editorial Team,” Paste Magazine, January 23, 2018.
“Google and Facebook Tighten Grip on US Digital Ad Market,” eMarketer, September 21, 2017.
“Why Google and Facebook Prove the Digital Ad Market Is a Duopoly,” Fortune, July 28, 2017.