Though he has no journalism background, Amazon founder Jeff Bezos certainly has what it takes to make a small fortune in the newspaper business today. What it takes is a large fortune.
What remains to be seen is whether an outsider, who is not bound by newsroom tradition and publishing custom, will do better than the leading families of American newspapers. I think he has a decent shot.
The greatest authority on newspaper fortunes large and small is The New York Times, which announced last week that it is selling the Boston Globe for $70 million. The buyer is John Henry, principal owner of the Boston Red Sox. The Times reported that the sale will allow it to “focus more on its core brand.” (1) The New York Post, owned by Rupert Murdoch’s News Corp. (which also owns The Times’ arch-rival, The Wall Street Journal), gleefully pointed out in big, bold type that the deal represents the destruction of 93 percent of the $1.1 billion that The Times’ controlling Sulzberger family paid for the Boston paper two decades ago. That estimate may be charitable, since The Times remains on the hook for some of the Boston paper’s pension obligations.
Just two days after The Times’ Boston massacre, Bezos and The Washington Post announced yesterday that the former is buying the capital’s dominant newspaper (which comes with a potpourri of additional minor titles) for $250 million.
At first blush, Henry is a much more logical newspaper buyer than Bezos. Henry’s Red Sox need to keep putting fannies in those expensively renovated yet oh-so-nostalgia-filled Fenway Park seats. To do that, he needs his team’s fortunes to feature prominently in local media, especially The Globe, its popular Boston.com website, and the New England Sports Network cable channel (which Henry also owns).
The Times had been fruitlessly shopping The Globe for a while, and might ultimately have decided to fold the operation if it hadn’t found a purchaser. Though I think Henry is acting out of community spirit, his purchase also makes strategic sense in the best baseball tradition. Once upon a time, beer magnates bought baseball clubs because the ballpark provided a convenient place to sell more brewskies.
Henry may only belatedly discover that owning a major metropolitan daily gives him a perpetually understaffed and underfunded newsroom, an expensive and outmoded printing and circulation system, and a shrinking base of advertisers who have more places to spend their dollars and fewer reasons to spend them on local media. If The New York Times Company could not get The Globe to stand on its own, how long will Henry’s patience, not to mention his budget, last?
Bezos is practically the opposite of Henry in this context. With a personal net worth estimated at north of $23 billion, he can sustain The Post practically forever if he wishes. But Bezos has no local ties to the District of Columbia; he intends to keep living in Seattle while running the Washington paper through hired hands as an absentee owner. For Bezos, news is another product to deliver, not much different than the e-books, toys and appliances he sells through Amazon. (To be clear, Bezos is buying The Post personally, not through his company.)
As strange as the transaction might appear at first glance, Bezos may be joining an existing trend and leading it forward, all at once. The big news publishers of the future are not likely to be the families that have owned major American papers for generations; one by one, they are selling out. The big news sources of tomorrow seem likely to be the people and companies who control distribution across multiple media platforms.
We don’t think of Google as a news source; we think of it as an aggregator of other people’s content, which is what it mostly has been up to this point. But I think Bezos will see Google as one of his most formidable competitors in the long term, if he is not already thinking along those lines.
Apple, too, may emerge as a big journalism distributor. Yahoo and Microsoft could be players if they could get their acts together. Facebook and Twitter have potential. These names may not make us think of news right now, but media sites seek to assemble the largest audience possible and sell that audience to advertisers – exactly what newspapers have always been about. Newspapers did not start carrying comics, horoscopes and Dear Abby to keep the public informed.
Distributors are playing a growing role in putting news on our screens, too. Comcast owns NBC. Various cable operators run local news channels; Time Warner’s NY1 is a best-of-breed example. Bloomberg is building mass-audience broadcast and online outlets, even as it makes its real money selling specialized financial data. (Michael Bloomberg also knows something about making a not-so-small fortune in the modern media business.)
We should not write off the Murdoch and Sulzberger empires just yet. They are doing some of the best work in the newspaper business of converting their audience from dead-tree to electronic delivery. Yet it may take someone like Bezos, who is not a product of the traditional journalism model and thus is not trapped by its boxed-in thinking, to figure out a way to cost-effectively gather, edit and deliver news content that customers will want to buy in the future, and how to attract those customers that advertisers will want to reach.
Instead of seeing The Washington Post as a single, all-encompassing title, Bezos might turn it into an umbrella brand, selling national political news and local style content to different audiences, at different prices, to meet different needs. Instead of a large, permanent newsroom staff, he might maintain only a small, core group of editors to run a large herd of independent professional journalists. Instead of working for one news organization, most reporters and editors in the future might work with a set of well-established titles, building personal brands while covering certain fields on behalf of those institutional names.
The Graham family, which had owned The Post through four generations and brought it to national prominence, was forthright in admitting that it had no answers to the questions about journalism’s future. Bezos was just as blunt.
“We will need to invent, which means we will need to experiment,” he said in a letter to The Post’s staff. “Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there.” (2)
Bezos, at least, has the money to work backwards to figure out how to take a leading news organization forward. Even if it costs him a fortune.