The sale of the Washington Post for $250m to Amazon founder Jeff Bezos may have taken Washington DC unawares – newspaper people are good at being secretive when it matters – but nothing in this emblematic story is surprising. There’s every chance that this is a good development. Here’s why.
The Post, owned until Monday by three generations of the Graham family, had been struggling as a media business and had sought a way out by buying into businesses which looked likely to help keep the company afloat. It had become an electronic education corporation with a famous newspaper as an appendage. Last month, the company bought a furnace business; it stopped describing itself as a media business some time ago.
Editorially, the paper still holds the attention of Washington’s older movers and shakers; its reporting can still set the capital’s agenda. But advertising revenue had fallen steadily, partly because it was not recruiting younger readers in sufficient numbers. Its editorial personality has lost much of its self-confidence.
I’ve written a book (published next month) which tries to explain exactly how this kind of crisis has come about in the European and American print news media. I argue that despite the threnodies for mainstream newspapers in difficulty and decline, the future prospects for journalism are good. As it happens, the book’s graph showing how online advertising income has not compensated for the loss of print ad income uses the example of the Washington Post.
In being owned by a company shifting out of the news business and in being sold to a digital billionaire, the Washington Post was typical of the time. The German Axel Springer group disposed of several print properties the other day. The Daily Mail and General Trust, owner of MailOnline, the most popular newspaper website on the planet, is gradually diversifying away from news and particulalrly away from general news for a mass readership.
A fresh generation of news media owners now control established institutions in the US and will apply their talents to the challenge of finding a business model to replace print advertising. Dotcom wunderkind Chris Hughes is revamping the New Republic. The New York Times has just unloaded the Boston Globe for a small-change sum to John Henry, the businessman who owns the Boston Red Sox and Liverpool Football Club. I would include in this small club the Mayor of New York Michael Bloomberg, who not only founded a business news agency which disrupted its established rivals but whose company is hauling the magazine Business Week into the digital age. Bezos has bought membership of this group and a blue-chip news flagship for a sum so small he will hardly notice it.
This is a familiar pattern in the history of news. News publishing frequently has to adapt to inconvenient changes in technology, business and politics. Those who adapt best are those who experiment best to find the innovations that work best. Innovation is deviation and the most successful deviants often don’t come from the business which is being disrupted.
Bezos’s only statements about the Post so far have been bland, but he grasps the shape of the problem. This is the key passage in his message to the Post staff: “The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment. Our touchstone will be readers, understanding what they care about…and working backwards from there.”
While that is hardly a business plan and part of a communication designed to reassure and not to alarm, Bezos is underlining the scope of the change to which newspapers must adapt, the need to experiment and the central importance of readers. If you think his generalisations a little obvious, please remember that many people in charge of news publishing businesses still can’t get a grip on one of those ideas, let alone all three.
As I say, there’s more background on all this in Out of Print: Newspapers, Journalism and the Business of News in the Digital Age: out soon and you can pre-order here. If I was on the staff of the Washington Post, I’d be braced for changes – but I’d be optimistic.