Amazon.com founder Jeff Bezos bought The Washington Post — a newspaper no one knew was for sale — on Monday, in a move with enormous implications for not just the news, digital, and retail industries, but for the future of democracy in America.
The Washington Post sale makes it much more likely that The New York Times, the world’s most influential newspaper, will be sold next year to New York City mayor Michael Bloomberg, who leaves office Jan. 1 with no announced plans for the future. Bloomberg, whose income runs more than $1 billion annually, chafes at how his Bloomberg company terminals are the nerve centers of Wall Street, but his solid (and deadly dull) news operation has less influence than some Internet pipsqueaks.
Bloomberg, like Bezos, has the very deep pockets needed to invest in the news business and devise a model suited for the Digital Age. Both men also have a long-term vision focused on wealth creation, rather than quick profits, and on affecting the body politic rather than enjoying a life of idle decadence.
Meanwhile, the Koch brothers may buy the Los Angeles Times, Chicago Tribune and other newspapers. With Rupert Murdoch in control of The Wall Street Journal, we could see a new age of publishing titans duking it out for readers, but in a world where readers are much more sophisticated and have access to other sources of information than in the yellow journalism era more than a century ago when Hearst and Pulitzer invented news to sell papers, or the Red Scare era when the Chandlers of Los Angeles effectively invented Richard Nixon and pushed him toward the White House.
It would be a huge public benefit to restore actual competition among news organizations in which ideas, policies and facts about how government and the economy perform actually got thrashed out in public.
If we are lucky we may even enjoy the many benefits of aggressive and skeptical reporting, instead of the stenography that Aaron Sorkin skewers on HBO’s The Newsroom.
While the new world of digital commerce and Internet news distribution opens new opportunities, taking advantage of them requires the aforementioned deep pockets. Neither the Grahams of Washington nor the Sulzbergers of New York have much economic muscle anymore, thanks to the creative destruction of the digital economy compounded by their own mismanagement.
A basic tenet of business is to give people more for less, yet for decades publishers raised prices while cutting the physical dimensions of the printed page and the size of the news staff, while paying the established talent (including me) to go away because they could not afford us anymore.
More profit for less product is not a sound strategy. It is, instead, a way to milk the business so when you sell out, the damage is less than it appears.
Bezos paid just $250 million for the Washington Post, close to pocket change for the Seattle mogul.
Last week the Sulzbergers sold the Boston Globe and other New England properties for $70 million, just four cents on the inflation-adjusted dollar they paid in 1993. It is no coincidence that the record high price for a newspaper was paid for the Boston Globe in 1993, the year the first Internet browser, Mosaic, opened the World Wide Web to an audience beyond the scientists and geeks who communicated in arcane code.
The New York Times is likely to sell for less than a half-billion dollars, even though it is so beloved by readers that they now bring it more money through circulation and Internet fees than advertisers pay to reach them, an exceptionally educated and thoughtful audience.
The problem here is not a thirst for news. Demand is great and growing, especially as the world becomes ever more complex and the federal government accretes power, secret power, to itself through massive spying and lying as well as reducing public access to information, an issue far too few journalists have reported on.
The problems are revenue and adjusting the newsgathering and delivery mechanisms to the times without violating the principles of sound journalism.
The biggest newspaper moneymaker – classified ads – has moved to Craigslist and the like. Old man Pulitzer called those ads “mustard,” a reference to the piles of tiny seeds that are needed to make the yellow condiment. Traditional publishers do not know how to get those ads back, but perhaps Bezos and Bloomberg will figure it out or come up with new revenue streams.
In the age of the printing press, where your newspaper was located mattered. You could put out a fine newspaper in Des Moines or Minneapolis; Delta, Mississippi or Watsonville, California, but you would have no measurable influence beyond the most distant porch where your paper was delivered each day.
The Los Angeles Times, where I worked from 1976 to 1988, spent a fortune delivering morning copies to every member of Congress, as well as opinion makers in Manhattan. It even briefly distributed same-day papers in Beijing, forcing earlier deadlines for hometown news, or at least so said a memo on the newsroom bulletin board to which I attached a proposed new slogan (which management quickly took down):
The LA Times — Yesterday’s News Day After Tomorrow.
But in the Digital Age location matters hardly at all — except for local retail advertising revenue, which is shrinking like a wool sweater in a clothes dryer.
Today Americans who want to know about illegal government behavior find it in the online version of the British newspaper The Guardian, but not so much in the Washington Post, New York Times or Los Angeles Times (which all did superb investigative work on Watergate, as well as the Pentagon Papers and domestic spying).
Indeed, The Guardian has been eyeing a U.S. print edition, like the Financial Times, which is based in London.
What digital distribution means, though, is a new opportunity. Publishers who can focus simultaneously on the news today and the audience of the future, instead of how to bring in enough cash this week to meet payroll, can both do well and enjoy the power of publishing a widely read news report.
They should even be able to afford properly staffed copy desks whose duties include keeping mistakes out of the report.