Jeff Bezos and the new publishing revolution
The last few days have seen a flurry of purchases of ailing print journalism flagships. The Boston Globe was sold. Newsweek changed hands again. And, most spectacular of all, the Washington Post was bought for chump change. Meanwhile, the Tribune group — publisher of the Los Angeles Times and the Chicago Tribune – is readying itself for sale.
There is nothing new about rich men buying newspapers. The surest way to enhance personal prestige is to become a press magnate. As Rupert Murdoch’s second wife Anna replied when asked how she was enjoying Beverly Hills, “It’s not the same if you don’t own the paper.” But something more interesting is going on than social climbing. New technology billionaires are picking up old money properties for a song. Online is moving in on hard copy. This is not evolution, it is a revolution.
The history of the press from its inception, when Bi Sheng invented moving type in 1041, to the proliferation of online publications today, has been a succession of tidal waves as typeset printing and rival media technologies have battled it out. Despite the contention that capitalism thrives on competition, in practice the market tends towards monopoly.
In the second half of the twentieth century, press lords found it easier to buy rival papers and merge them with their own than compete with smarter reporting and more dramatic pictures. By the turn of the twenty-first century, many American cities were left with one upmarket broadsheet and one downmarket tabloid, often owned by the same person. For 50 years until the Internet hit, press barons got rich by cornering the market in supply and milking their advertising monopoly.
Monopolism was bad for business and worse for journalism. Like all monopolies, from Amtrak to the Post Office, monopolist papers turn in on themselves and take their readers for granted. For instance, the New York Times Company’s domination of the eastern seaboard, bolstered by the Globe in Boston and TV stations, ill served its customers by squeezing out competition and encouraged the company’s managers to rest on their laurels. Unaccountable to market forces, their journalists combine into an unassailable, inaccessible priesthood, responsible to no one. Their concomitant complacency has contributed to the widespread hatred for the self-serving habits of what those who feel shut out call “the mainstream media.”
The golden age of city or regional monopoly papers came to an end when news could increasingly be found online for free. What the Internet revealed was that papers across the land had been publishing near-identical news and views. A report for a New York paper was almost word-for-word the same as for a Los Angeles paper. Monopolism had bred laziness in a rough and ready trade that prospers best when it’s sharp, critical and competitive.
Now, if you are under 50, your main news source is more likely to be a social network than a newspaper that you will read not in hard copy but on a phone. Paywalls have not helped turn the tide against online sources; few papers have enough genuinely original content to warrant a subscription. Why pay for the New York Post when you can get identical gossip with more pizazz free from the London Daily Mail? Meanwhile, the plethora of online aggregators like the Huffington Post and sites such as Politico steal readers and ad revenue.
The only publications immune to this trend are financial papers like the Financial Times and the Wall Street Journal, whose readers offset expensive subscriptions as a business-to-business expense. General interest papers cannot compete. This puts into contention Murdoch’s strategy of turning the Journal into a family paper to rival the New York Times. How long before the inexorable drift downmarket, replacing news on stocks and companies with sports, fashion, gossip, food, local news, travel and the rest, drives business readers elsewhere?
The current wave of press acquisitions sees online billionaires stepping in to save ancient brands with the promise of delivering much needed know-how about how to make money in cyberspace that old-school print owners so conspicuously lack. So Michael Bloomberg bought BusinessWeek, Etienne Uzac, publisher of International Business Times and other online titles, bought Newsweek, and Amazon’s Jeff Bezos bought the Washington Post. (John Henry’s purchase of the Boston Globe and Warren Buffett’s acquisition of Media General are inspired by a different calculation: that truly local publications can survive because they provide parochial news that is exclusive.)
The arrival of Internet billionaires into the cozy world of hard copy has sent shivers down the spines of some journalists. There is talk Bezos might start paying contributors by the click or might impose his libertarian views on the editorial board, which, under the benign neglect of the Grahams, has long been allowed to run its own show. Bezos says he has little interest in journalism per se. He is excited instead by the challenge of making a silk purse out of a pig’s ear.
But why shouldn’t Bezos throw his weight around? Why should he subsidize a jungle gym for journalists? He who slips the nickel in the jukebox picks the disc. That the new owner shouldn’t be allowed to promote a world-view he believes in seems a strange argument from reporters on the verge of extinction. Journalists tend to be an ungrateful lot; if they were more respectful they would be inferior journalists. But what alternative to a white knight purchase of the Post did they have in mind?
Employed too long by monopoly news and comment providers can make journalists forget that pluralism is the essence of a free press, and a free press the essence of democracy. The more voices available from the broadest of backgrounds, the more voters can choose what they find plausible or important. Democracy, like jury trial, assumes that, taken at random, people are fair-minded and can tell the difference between truth and lies. If online proprietors start pushing a preposterous line, they will be found out. Look how MySpace was abandoned as soon as users felt manipulated and taken for granted.
The Internet has provided a near-perfect market in goods and services, which has reinvigorated commerce, reduced prices, and increased living standards. A similar market operates in information, as seen in the rise of popular political movements spurred by the Internet. The only way to deter democracy is to limit ownership of the press and restrict Internet use, as in the dictatorships of China, Russia and North Korea.
Reporting is expensive, so journalists have always been beholden to wealthy owners. In the past they have been called Pulitzer, Hearst, McCormick, Graham, Sulzberger, Newhouse, Chandler, Murdoch and Bancroft. Today’s online moguls — Bloomberg, Bezos, Uzac, Huffington, Diller, Gates, Zuckerberg, Page, Brin, Case and the rest — seem a fair cross-section of humanity representing a broad swathe of views. If they are ever tempted to step too far from rational thought they will find themselves atop a fast diminishing asset.
Nicholas Wapshott is the author of Keynes Hayek: The Clash That Defined Modern Economics. Read extracts here.
PHOTO: A morning edition of the Washington Post lies in a driveway after delivery in this photo illustration taken in Silver Spring, Maryland August 6, 2013. REUTERS/Gary Cameron