Mark this point in your calendar as either the rebirth of or, if you are a glass half empty kind of a person, another ringing death knell for American media.
Three iconic brands have been jettisoned in the past week.
Today, the biggest and most beloved of them – the 137-year-old Washington Post – has been sold by the Graham family after 80 years and four generations of ownership. The Washington Post is most famous for breaking the Watergate scandal that toppled Richard Nixon, and armies of budding journalist cheerily accept low pay and terrible working hours in the hope that one day they too might become a Woodward or Bernstein.
The sale of the Post comes hot on the heels of the New York Times last week selling the Boston Globe to the very rich owner of the Boston Red Sox for $US70 million ($78.65 million). This is less than a tenth of what it paid for it in 1993.
On Saturday, another American icon, Newsweek, was sold for an undisclosed – and you can be assured token – sum. Newsweek had already been down this path once before. Back when online publishing was the holy grail and print was on its dying knees, another very rich person, Barry Diller of InterActiveCorp, thought he could merge one digital operation, TheDailyBeast.com, with a challenged but loved magazine and somehow come up with more than the sum of its parts. It didn’t work and ultimately Diller has decided that the chalk outline of Newsweek didn’t suit the aesthetics of his gleaming Frank Gehry-designed glass tower on New York’s West Side highway. College humour, dating sites and restaurant reviews are more lucrative than serious journalism.
The simple fact of the matter is that print is dying and no one knows what to do about it. Daily circulation among US newspapers has fallen 26 per cent in the last 20 years. Revenue from circulation has fallen much faster – print-only circulation fell 14 per cent in the US last year. A similar story exists in Australia.
Once upon a time, at the dawn of the internet, it was assumed that advertisers would be so thrilled they could drill right down to an individual reader that they would pay enormous amounts of money for access to their eyeballs, and therefore content should be made free and as widely disseminated as possible. The ad revenue would cover the costs of newsgathering.
Alas, newspaper owners and managers turned out to be the very definition of analogue and failed to realise that a company like Google, or Carsales, or REA could take all that clumsy third-party ad serving off their hands and talk directly to consumers via search. (Alan Kohler documents the failure of Fairfax to recognise this until much, much too late.)
Now publishers are desperately hoping that readers will start paying for news. In some places it is working – The New York Times' incredible global reach means that is has grown subscribers (many international) by 40 per cent to over 700,000. But advertising revenue continues to drop both for the print and digital editions. If the world’s most influential newspaper, with nearly unparalleled global coverage, is still struggling then it is a long road ahead for the lesser lights of the industry.
If you are a Schumpeteran and believe that growth comes from ‘creative destruction’ then you might believe that the death knell can’t come soon enough and something better will rise from the ashes. The problem with that theory is that, after the recent sale of The Washington Post, The Boston Globe and, to a lesser extent, Newsweek, you are now placing your bets on the 'billionaire saviour' and the views they carry. Billionaires who can buy access to the entire American public, and sway their views with money they might have discovered down the back of a sofa.
Jeff Bezos says he will continue the tradition of crusading journalism that made the Post a national icon. Liberal Americans – and Australians, too – will be glad to hear that. Anyone who believes in climate change will be concerned to hear that another one-time icon of the US press, The Chicago Tribune, which also owns the LA Times, may be bought by some other very rich men – the oil billionaire Koch brothers. These staunch funders of climate change-opposing research and laissez-faire economics see the appeal of buying the fourth and ninth largest papers in America as a way of “making sure our voice is heard”.
Make no mistake, even if it is dying, print media still has an enormous influence on public opinion and how policy is formed – this Australian election campaign is a perfect example.
Once, newspapers made so much money that journalists were free to go about their business of muckraking without too much influence from owners, advertisers or shareholders. Now, with so many papers in dire straits, and one single source of support – the deep pocketed billionaire – they have to make one person happy. That is not good for democracy.
What the industry really needs is someone who can actually help it learn how to make money, which is why Jeff Bezos buying the Post is a fascinating prospect.
Bezos actually knows how to make money on the internet and his team of very clever people at Amazon may be able to deliver on the original promise that set content free. There is an enormous amount of information that I, as editor of Business Spectator, might like to know about you if I had the resources to dig. I would know about your political leanings, the companies you follow, how you like to communicate with others. With a strong subscription platform, I would determine your income, your job and your household status.
Amazon knows me. It changes the homepage I visit and serves up selections of things I might like to buy on the basis of previous purchases.
As a publisher, I’d like to offer a similar service, giving you a home page with content you want, and letting advertisers serve you ads that are only relevant to you.
This is the holy grail of online publishing and one that is still a future dream.
The Washington Post may be the company to achieve it.