It has been a busy and confusing week in the news, I think. There have been lots of eclectic events – hence the headline of this column.
Jeff Bezos, iconic CEO and 19 percent owner of Amazon, buys the mighty Washington Post – the poster child newspaper for how our democracy benefits from strong, independent and credible news sources. Think Watergate and think how history could have been radically altered had there not been a Washington Post around to bust a crooked president and force him to resign.
We’re told that Bezos is paying a mere pittance for the Post – $250 million. Only a few years ago, the New York Times bought the Boston Globe for more than $1 billion and just recently sold it to Red Sox owner John Henry for $70 million. And meanwhile today, any mediocre money-losing 2-year-old online startup with a few followers sells for $300 or $400 million. What?
So it looks like more bad news for the print news media, you say. Well, I am not so sure about that. Depends on how you look at it. “Context” can be a funny thing. And of course, the real smart folks among us – myself not included – tend to be wise because of their ability to see and understand context and what it means going forward.
So what context do I have in mind? Well for starters, when the 12th richest person in the world (according to Forbes Magazine) and the founder and CEO of one of the most successful Internet companies on the planet (Amazon) invests a quarter billion dollars in print, I have to think that is a positive context for print. Bezos is no dummy, and I don’t think he invests in things that he believes will lose money or fail in the long run. And I think it is really significant to understand that, unlike much of corporate America, Bezos has always had the reputation for being willing to sacrifice short-term profits in order to build or create long-term profitable enterprises. That is, he is willing to invest in the future even if it doesn’t pay an immediate return.
And Bezos is not alone in his bet on print. The richest person in the world and arguably the smartest investor – Warren Buffett – in the last two years or so has spent in the neighborhood of $400 million acquiring small and medium-sized newspapers around the country. What does Buffet know that all the print doomsayers don’t? Buffet recently was quoted as saying that “I believe that newspapers delivering comprehensive and reliable information to tightly bound communities … will remain viable for a long time.”
Another piece of context just flashed across the radar screen Friday, Aug. 9. After estimated losses exceeding $300 million, AOL announced the closure of up to 40 percent of its 900 or so Patch sites and layoffs for 400-500 employees in an effort to turn around the hyper-local Internet-only news effort. That is, AOL – the most recent player with deep pockets to try to monetize online only news – has all but thrown in the towel.
So what might this mean? I think that it means that the news industry is struggling mightily to try to adapt to change. It must evolve, and evolve it will, I believe.
No one has found the “formula” yet that adds up to a viable dissemination of news only online. “Scale” is one of the main obstacles that must be figured out. But that formula – including the solution to the “scale” problem will emerge sooner or later.
On a local scale, print – local newspapers – is still the primary media that delivers an audience “at scale” (in large enough numbers) and at a cost that makes sense for local businesses. The fact that local publishers are then able to significantly increase that already at-scale audience for their advertisers by adding / bundling online products such as websites, Twitter, Facebook, email and other digital products only expands print’s reach and adds weight to advertisers’ dollars.
We now have some of the best funded and most innovative minds in the world vested in finding the right formula for news dissemination – with the exception of AOL – which I find tremendously encouraging. The smartest ones are betting that “print” will continue to play a fundamental role in the news business. My guess is that they are also assuming that in the future, a hybrid model will evolve that combines both print and online in the crafting of a profitable business model – an idea that community newspapers like Appen Media’s four weekly publications have been successfully putting into practice for the past few years.