Evaluating only La Máquina’s profile at its peak — without knowing the outcome — the model ranked Competition as the #1 likely cause. Documented cause: Unit economics.
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Documented cause
La Máquina built a digital media brand in Chile covering technology and business for 2M monthly readers. As Google and Facebook absorbed digital advertising revenue in Chile, advertising rates for local publishers fell 60% between 2016 and 2022. The company attempted to transition to paid subscriptions but the Chilean market's subscription adoption was too slow to offset advertising revenue losses. La Máquina shut down in 2022.
Lesson
“Digital media advertising models are in terminal structural decline in every market Google and Facebook reach. Start the subscription transition before you need it. By the time advertising revenue is insufficient, you have two years of runway left — not enough to build a subscription base.”
FAQ
Why did La Máquina fail?
La Máquina, a Chilean digital media startup with 2M monthly readers, shut down in 2022 after Google and Meta captured advertising revenue caused a 60% decline in local digital ad rates. The subscription transition was too slow to compensate.