What is future of newspaper business?

by Ned Barnett, News and Observer, August 11, 2013.

Thirteen years into the 21st century, newspapers are still struggling to find their place in it. First they underestimated the Internet and then were undermined by it; first they gave away their content, now they’re charging for it; first they sought refuge through chain ownership, now they’re being bought at discount by deep-pocketed individuals.

The wavering thinking by and about newspapers was on display last week in the reaction to Amazon founder Jeff Bezos’ purchase of The Washington Post for the shrunken figure of $250 million – a small bet for a man worth $25 billion.

Some greeted the purchase as a breakthrough. Finally, they said, a tech guy, unencumbered by what the Post called the “fusty mechanics of the newspaper business,” who could transform the Post into a vibrant, relevant and profitable online force. And once changed, the venerable news organization struggling in the desert of print advertising could follow Bezos into a digital Promised Land flowing with clicks and money.

Still others responded out of sentiment. They mourned the end of ownership by the Graham family and ties that go back to an earlier Washington, when Ben Bradlee had drinks with JFK, publisher Katharine Graham hosted parties for presidents and prime ministers, Woodward and Bernstein helped force the resignation of President Nixon and seemingly everyone read the Post.

Others worried about Bezos, this Silicon Valley savior. Is a free press really rescued if it’s owned by the founder of a vaguely Orwellian enterprise that aspires to sell everything to everyone (preferably without paying sales taxes)? Is this about preserving the Post or giving the titans of Silicon Valley leverage in Washington, D.C.?

John Cassidy of The New Yorker wrote of Bezos: “I have a nagging, if possibly unfounded, suspicion that his primary motivation in buying the Post is to protect Amazon’s interests in the political battle, which is sure to come, over the company’s monopolistic tendencies. Why do I suspect that? In part, because I am a skeptic. But also because it’s just about the only explanation that makes sense.”

Ultimately, though, last week’s response to the surprising sale was about a familiar question: What is the future – if there is a future – for newspapers in the digital age?

It is remarkable after more than a decade of angst over this question that the answer remains so unsettled. The numbers, of course, speak clearly. Newspapers’ circulation, revenue and staffing have dropped dramatically. And the demographics are also emphatic: People under 35 generally don’t read newspaper print editions. Soon it will be people under 45. And, inevitably, the audience will become so small it will not attract sufficient advertisers or merit the cost of production.

And yet there is a reluctance to accept a world without the daily printed newspaper. It’s no longer essential for the weather, TV listings, sports results or, painfully for the bottom line, classified ads. But people value the idea of a common forum in which a city or community reads the same order of stories, sees the stories’ importance ranked by page and fumes over or applauds the day’s editorials. People prefer print for some communications, including many types of advertising. They want their loved one’s obituary in the newspaper. They want their voice heard there, too. (The N&O still gets more than 1,000 letters to the editor per month.)

And people are reassured by the idea of a Fourth Estate, whether in print or online. They think it’s crucial to have reporters and editors trained to find and assess information and who can then question government and expose the misdeeds of the powerful.

One of the ominous aspects of the fading of print newspapers is that little is arising on the digital side to replace them. There are some noble news efforts funded by foundations following a kind of PBS model, but they lack the revenue and resources of newspapers in their prime.

Now, split between growing indifference to newspapers and fear of losing them, hope rises for saviors who will respond to both aspects. In this role, Bezos is the ideal. He’s wealthy enough to invest for the long term and possibly shrewd enough to discover how the demand for news can be tapped to pay for the cost of finding, developing and checking it.

“The Internet is transforming almost every element of the news business: shortening news cycles, eroding long- term reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs,” Bezos wrote to Post employees. “There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment.”

It’s notable that Bezos appreciates the balance between timeless curiosity and storytelling and the digital marketplace. After all, he began Amazon to sell an old form of communication – books. At Amazon, he has banned PowerPoint presentations and encourages employees to express their ideas by writing narratives.

Bezos said he plans to stay in Seattle and avoid direct involvement in the Post. But, of course, by buying this iconic newspaper he has in a sense become involved in the future of all large newspapers. He may be the one who finds a way to make an industry built on yesterday’s news an essential part of tomorrow’s. Good luck to him.