What’s Next for the Bezos-Owned Washington Post

The Bigger Picture

Stephen Lacy, Michigan State journalism professor, sees the industry in flux today. “People need and want journalism,” he says. “This has not changed with digital distribution. Two things have changed. First, it is easier to get journalism to people. Second, the system of supporting journalism has and continues to change. All types of participants in the journalism system (citizens, journalists, advertisers, etc.) continue to adjust to the changes and look for some form of equilibrium. Just what form that takes remains to be seen. However, it will likely involve people paying a higher proportion of the cost of producing news and coming up with new ways of generating revenue from advertisers and others.”

Victor Pickard, a professor at University of Pennsylvania Annenberg School for Communication, says, “Most media coverage thus far has missed the bigger picture. As newspapers have become extremely devalued they are increasingly vulnerable to being co-opted by various agendas since they still retain significant political power. We should be having a national conversation about what it means for our democracy when newspapers become the playthings of the very wealthy.”

Lacy explains that it is “highly unlikely that publicly owned companies, with the exception of NYT because of its two-tier stock ownership, can generate the historical profit levels and remain in business. It will not surprise me to see more of the publicly owned news companies sell off properties or go out of business.”

And then, there’s the economy. “The impact of the great recession and the digital transition has not hit all newspapers equally hard,” says Lacy. “The hardest hit have been the big metro dailies. Although they have suffered, smaller community dailies and weeklies have performed better financially than have the larger dailies. Many smaller dailies exist in quasi-monopoly markets. About half the dailies in the U.S. have less than 25,000 circulation.”

Lacy sees a few predictions on the horizon:

Some news organizations will close, but most will not.
Some of the positions lost during past decade will be replaced, but not all of them.
The types of local news organizations will become more varied and numerous in large cities, less so in smaller cities.
The U.S. will continue to develop up-scale, down-scale journalism system; TV will be the down-scale, and text-based journalism will be the up-scale.
Journalism content will continue much as it is now, but it will use all platforms (mobile) and multimedia will increase slightly.
Companies will continue to consolidate across markets, but they are less likely to be publicly owned.
News organizations will become more sensitive to community needs.
If the news organizations build audiences, local advertisers will follow to reach educated middle and upper-middle class.

“We now see an increasing separation from the place where news is produced from the place news is consumed, often draining monetary resources from the producers to the relayers,” according to Goyette-Côté. “For example, Apple not only gets a share of every newspapers sold on its ‘newstands’ (between 15% and 30% depending on companies and countries), it also sells the unit (the daily paper) as a cut down price (it has to be lower than the paper version to attract customers). In Canada, one of the strategies has been to put up paywalls on the newspapers websites, and now, most of the news websites are behind a paywall with success that varies from one outlet to another. An interesting case is Montreal’s independent newspaper, Le Devoir, which has a model where advertisement represents only 50% of the cost of the paper, the rest being assumed by a higher sale price, interesting offers for new and younger customers as well as donation from wealthy readers. It turns out that the newspaper is making ends meet and produces the most in-depth content of French Canadian newspapers, and has even seen a slight increase in its readership! Which reinforces the assertion that people are willing to pay for good news.”

Steve Outing, an independent media futurist and digital-news consultant, explains that Bezos’ “surprising purchase of the Post does signal a change in journalism—and I’m optimistic that it will be for the better. If you think about the history of newspapers, many decades ago most newspapers were privately/family owned. Then came consolidation of the industry as major chains (Gannett, Knight Ridder, Tribune, MediaNews Group, et al.) gobbled up most American newspapers, leaving only a few independents. In recent years, the newspaper industry tanked; we saw bankruptcies, shutdowns, and investor groups and billionaires (like Sam Zell, who was a disaster for Tribune Co.) coming in to buy at fire-sale prices. Some of those investors were probably more interested in the real estate than the newspapers, so we continued to see more and more layoffs, less investigative reporting, and continued circulation declines and ads moving elsewhere.”

Outing believes that Bezos is representative of this trend, but Bezos is “a different kind of new owner. He appears to value the Washington Post’s value as an important institution in our democracy, rather than as an investment that he plunders to add to his fortune. He doesn’t have to answer to a group of investors, and his history is of running a business and making decisions for the long term, even if it means short-term pain—something that the old corporate chains couldn’t/wouldn’t do because they had to answer to Wall Street. So the optimism comes from knowing that Bezos is putting a small portion of his personal fortune into buying Post, and that he’s likely to be willing to take risks and reinvent the Post in a highly aggressive way; the newspaper industry has not done that yet.”

Jane Kirtley, Silha Professor of Media Ethics and Law at the University of Minnesota, weighs in on the state of newspapers: “I always wonder whether owners who come to the news business from the other parts of the private sector have any notion of the role of the independent press as advocate for values that advance democracy. Of the need to challenge authority? Of the need to stand up to governments (other than our own) that seek to control and suppress free expression? Although the Post no longer has the vast network of internationally based correspondents that it once did, it could still be vulnerable to lawsuits or prosecution for its reporting in other countries. Will Bezos support the idea that the Post should be operating in ways that promote American values of press freedom or free expression, or will he adopt the view of many others in the private sector that advocate simply obeying other countries’ laws as a condition of doing business there? Google, Yahoo!, and others have already encountered this issue in a variety of countries and contexts; I don’t know what Amazon’s experience has been to date. In theory, Bezos’ purchase could be very liberating for the Post and herald a new era in the history of a great newspaper. Whether it will play out that way remains to be seen.”

Richard John of Columbia Journalism School sees Bezos as someone who is very good at understanding the customer experience, “and he just might be able to build a team of journalists who could reinvent the newspaper for the 21st century.” He says, “Newspapers are in a certain sense analogous books—they are a highly specialized medium for a varied and often quite discerning audience. And book distribution is one market in which Bezos has successfully rewritten the rules of the game. Content is of course different from distribution—and newspapers like the Post have long played a role in public life that is far greater than that of all but a handful of books. This, of course, raises the stakes. But there is, at this moment in time, no other practical way forward for this medium. Bezos has demonstrated that he understands customers—it might just be a habit of mind that could reinvent this vital national institution.”

We can only wait and hope.