No one doubts the value or importance of high-quality reported news delivered in a timely manner. Despite that, the news industry is no longer known for being wildly profitable.
Presumably, Jeff Bezos must realize this as he’s just ponied up $250 million in cash to buy one of the country’s most well-respected news institutions, the Washington Post. And just like his actions running the world’s largest online store Amazon, Bezos is likely to provide the publication with something it desperately needs to prove itself as a worthy business: time.
Time for what? Well, to start operating much like a startup, which is not easy to do for older companies, especially those that are publicly traded. What I mean is the Washington Post will basically need to experiment religiously while promising little (if any) profit. Bezos already managed to do this at Amazon, which makes him the ideal business leader to make it work at the Post — and possibly the rest of the news industry, which will surely be watching the Post‘s every move.
“[Bezos] clearly thinks that Amazon’s style and operating philosophy are broadly applicable: experimenting a lot, paying attention to what data tells you,” Brad Stone, author of the forthcoming book The Everything Store: Jeff Bezos and the Age of Amazon, said in a recent interview with New Republic Magazine. “Look at what he said in his letter about starting from the reader and working backward. He believes that this philosophy can be successful in all corners of business.”
In his letter to Washington Post employees earlier this week, Bezos admitted that the current business model wasn’t working. He’s right, not just for the Post but for nearly all news publications. Despite research showing its growth, display advertising isn’t bringing in enough revenue for news businesses. Sponsorships — such as clearly and transparently marked sponsored content or special sponsored sections — are unpredictable in terms of profitability because of how different it can be across each publication. And besides, sponsorship campaigns are harder to sell potential ad clients, who can get the same level of audience impact through programmatic ad campaigns that often cost less money and can be more easily tracked across multiple publications.
The news industry is in for at least a decade of small victories when it comes to being profitable. And I won’t even waste time trying to explain how it can change or transform into a highly profitable industry. (Plenty of others have already given this thorough analysis, including some notable pieces by Bloomberg and the Post‘s Matea Gold and Cecilia Kang.)
So yes, the news business is going to need to operate much like a startup — or rather an Amazon-esque low level of expectations from investors that is typically afforded to a hot startup company. And the Washington Post has benefits other up-and-coming news startups don’t have either, which is lots of influence and respect cultivated over a century. That means it can skip all of the crap younger news publications have to resort to to gain enough influence to matter, such as reporting on half-truths, rumors, and opinion-slanted reporting. And since this is the digital era of news, we can lump in click-bait content like listicles, slideshows of kitty pictures, hollow article reblogging that doesn’t add anything to the conversation, and other low-brow stuff.
Of course, a lot of factors could prevent the Post from hitting success even in the long-term future. Bezos could position the paper to provide a positive voice on tech policy issues that favor Amazon. He could follow through on his claim to change the name of the paper to something completely different, thus losing the long-held influence that the name “Washington Post” commands today. Or he could get bored after a few years and sell it off after realizing he can’t make money.
But I don’t think any of those scenarios will come to pass, just like I don’t really buy the New York Times’ logic that Bezos is just another billionaire buying an old newspaper as a symbolic trophy. Bezos clearly has an interest in becoming a responsible media baron, which is evident through his investment in Business Insider and his efforts with Amazon Publishing to sell time-sensitive, newsworthy interview pieces separately instead of wrapping it within a magazine.
And furthermore, Bezos stands apart from other “media baron” billionaires that have snapped up influential U.S. newspapers in the past few years, too. Take Rupert Murdoch, who bought the Wall Street Journal in 2007, or Warren Buffet, who gobbled up 17 notable local newspapers in the southern U.S. over the past two years. Both Murdoch and Buffet are skilled businessmen on opposite ends of the political spectrum. By comparison, Bezos is much different: His political party leanings are arguably less pronounced than Murdoch (right wing) and Buffet (left wing). And while Buffet is the owner of a successfully revitalized chain of Dairy Queen restaurants, Bezos is diving head first into the business of privatized space industry with his Blue Origin startup.
But for now, we’ll just have to sit back and wait to see how much time Bezos will buy into the news industry. The $250 million he used to buy the Post is merely the upfront cost. Bezos (or some other benefactor) will likely need to sink more money, energy, and attention into the publication before we see any kind of significant shift in the news business.