Is the decision by Jeff Bezos to pay $250m (£163m) for one of the US’ most venerated newspapers, The Washington Post, a sign of things to come?
It’s the end of an era for the paper, which has been owned by the Graham family for four generations. But in a frank letter to staff, Donald Graham, Post Co’s current chief executive (of whom Bezos rather gallantly said: ‘I do not know a finer man’), admitted the family had simply run out of ideas.
‘We had innovated and to my critical eye our innovations had been quite successful in audience and in quality, but they hadn’t made up for the revenue decline,’ he said.
‘Our answer had to be cost cuts and we knew there was a limit to that. We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed.’
The Amazon founder assured reporters he wouldn’t have a role in the day-to-day running of the paper: its new parent company has nothing to do with Amazon – it just happens to be owned by Bezos. Naturally, though, there are worries the paper could be about to become less Washington Post, more ‘WashPo’.
Given the growth of online news consumption, it was only a matter of time before newfangled tech upstarts like Bezos began to absorb grandes dames of old media such as the Washington Post. But judging by the reaction from commentators, Bezos’ acquisition could be indicative of one of two things.
Firstly, that despite their attempts to find a new model, newspapers are still in such a fug of ineptitude that it’ll take nothing short of a zillionaire tech entrepreneur (who, lest we forget, is all about growth – often at the expense of profits) to work out how to make them start earning.
Failing that, Bezos can just throw cash at it until it stands on its own two feet, say those who have pointed out that newspapers shouldn’t have to be subsidised by bored oligarchs with too much time on their hands (although, to be fair, it’s a bit more community-spirited than investing in, say, a football team).
More likely, it could be that newspapers are so close to working out an online model it’s piquing the interest of big-time tech entrepreneurs.
There’s evidence for this argument: advertising-based models are increasingly being ditched by publishers in favour of paywalls.
That means they no longer base their business model on selling page views, allowing journalists to produce fewer, higher-quality articles – which in turn makes people want to pay. (Although it would be churlish of us not to mention that this year, for the first time, the Daily Mail’s digital advertising revenues outstripped ad revenues from its print product for the first time – so there is still room for the ad-based model. As long as Kim Kardashian’s outfit choices are involved).
And Bezos isn’t the only one to be piqued by the idea of newspaper ownership. Three days ago, Liverpool owner John Henry bought the Boston Globe for $70m. Admittedly that’s a lot less than the $1.1bn the New York Times bought it for in 1993 – and the Globe’s buildings are probably worth close to $70m by themselves. But it does suggest that the final nail hasn’t been hammered into newspapers’ coffins quite yet.
Whatever Bezos’ motive for buying the paper, it’s clear his ownership will mean big changes at the Washington Post.
‘That’s essential and would have happened with or without new ownership,’ he told staff in a memo.
‘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.
‘We will need to invent, which means we will need to experiment,’ he added.
Our money’s on Bezos going for the ‘Buzzfeed’ model of journalism. ‘10 hilarious Obama Gifs’, anyone?