You double down in a crisis.

When the stock market tanks, you don’t pull your money out, you buy.

This was the record labels’ biggest mistake, it haunts them to this day, when Napster hit they should have started spending, getting ready for the new reality, instead they kept cutting and no one under thirty works there anymore, certainly not anybody with any ambition.

Just because newspapers are financially challenged, that does not mean there’s no more need for NEWS! And that’s the dirty little secret, despite all the opinionated bloviating online, there’s very little newsgathering going on online, certainly not when it comes to the big issues of the day…finance, politics and international developments. This is what newspapers do best.

Newspapers…

There’s no reporting at the TV station. Local outlets are all talking heads, models in a contest to air that which will get ratings. Cable outlets are not much better. And they and the networks take their talking points from newspapers. The “New York Times” might be struggling when it comes to income, but in terms of influence, the paper’s never been bigger, it’s a powerhouse. Because the “Times” has boots on the ground, and none of its competitors do…except for the “Wall Street Journal” and the “Washington Post.”

That’s what Bezos is buying. An army of newsgatherers. And if you don’t think this is valuable, you don’t know the aphorism “knowledge is power.” And it is. You can learn more about the music business by sitting home and reading than going to any number of endless lunches. That’s what separates the winners from the losers…information. He who has it wins. He who controls it has more power than any banker, any manufacturing titan. Yup, while the Grahams were asleep at the wheel, figuring they had to save the family fortune, Jeff Bezos saw an opportunity.

Does tomorrow’s newspaper look like today’s?

Hell, Yahoo’s directory was eclipsed by Google’s search engine. How information is accessed always changes, especially in the digital era. But he who writes the news, he always survives, as long as he continues to evaluate and change distribution.

Paywalls are for pussies. It’s a head-scratcher why all publications are erecting them. They learned none of the lessons from the music industry. Foremost of which is your enemy is not reduced revenues, but obscurity. The key is to be the paper of record, to be available to everybody. And not everybody is concerned with everything, but when you break a story…be sure it can go viral.

In other words, if you make people buy your music to hear it, you’re never going to make it in today’s marketplace. And it’s always about the music. Thom Yorke can get everybody to pay attention to his opinion on Spotify, but he can get almost nobody to listen to Atoms For Peace. And that’s backward.

There’s a huge desire for news. By pulling back from the audience, the paywall police are doing it wrong.

How do you do it today?

You decide what to cover and then own the sphere. That’s the Apple paradigm. The iPod lesson. They OWNED portable music. Who will own the news of the future? Not TV, certainly not the “Los Angeles Times” and the other papers that have punted, who’ve closed foreign bureaus and cut staff in order to maintain margins, there’s nothing left there, no reason for people to pay attention.

So what does Bezos do with his asset?

Who knows?

But he comes from a completely different background from yesterday’s newspaper owners. He knows you invest and reap profits way down the line, when you’ve eliminated the competition. Amazon killed Borders. Its only real competition is the struggling Barnes & Noble. Like a venture capitalist, Bezos is investing today for rewards tomorrow.

Talent is available. The “New York Times” loses Nate Silver, not knowing what today’s star reporters want and need, and Bezos opens up his checkbook and gives a home to all those great writers who’d rather report than build a website and go it alone. Yes, he can make the paper attractive, as opposed to the record labels whose big selling point is they’re the last resort, if you want to get on terrestrial radio and make inroads into physical retail. That’s like saying I’m the last Smith-Corona dealer and if you want a typewriter…

Bezos is all about the future. And he comes from the school of Microsoft. The first iteration sucks, but over time the product is refined and dominates. From the joke of the first Kindle to the Fire today. Hell, Amazon killed the Nook, right?

That’s what you do, kill the competition and shine.

But Bezos also comes from the school of Apple. Wherein you don’t have to be first, but if you do it better you can arrive late and win.

So everybody says that newspapers suck, business is lousy and you can get everything you need online. And then five years from now, they say just the opposite, that he who controls the news is king.

Don’t look at today, look at TOMORROW!

~~~


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Category: Digital Media, Financial Press, Think Tank, Web/Tech

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

19 Responses to “Bezos/Washington Post”

  1. DeDude says:

    I completely agree that most news organizations are killing their one advantage over the blogs – real “boots on the ground” reporting. That is the only thing I would be willing to get from them – and in the future only via the internet. But their business model need to be build on revenue from user profiles and targeted adds. Maybe we will get non-profit news organizations with partial funding from philanthropy or crowd funding of individual investigations.

  2. chomen says:

    I’ve got AMZN at -15% for past 5 year earnings.

  3. Lyle says:

    Given the return the NYT got on the Boston Globe, would it have made more sense a long time ago to make it just a section of the New York Times for Boston News, in fact had they done then they could have introduced other cities starting with where they had news bureaus, Washington, LA, and Chicago would be obvious places to start. Essentially for national news all those papers have only one staff, and one editorial page, all be it the columnists might not all be in New York. Yes the LA times tried this in S Calif with regional editions, but why not go national with the concept? (Then also you could get local advertisers who don’t want national coverage for their adds such as groceries. ) But in a news group why have multiple Washington bureaus?

  4. Petey Wheatstraw says:

    I am reminded of the AOL/Time Warner deal.

  5. Joe says:

    “Hell, Yahoo’s directory was eclipsed by Google’s search engine. How information is accessed always changes, especially in the digital era. But he who writes the news, he always survives, as long as he continues to evaluate and change distribution.”

    It comes down to an instantly available, almost infinitely divisable and uniform space: the ‘net. The cost of access is electricity and the device. You’re right. The cost of distribution is approaching zero. But the competition for the audience is almost infinite. I just can’t be optimistic that without the subsidy of the sports page and advertising to aggregate income, that first class political/econo/social reporting will be widely available and familiar to those who do not deliberately seek it out first, regardless of cost. That was the strength of newspaper journalism. The aggregation of the NFL and the NBA and Doonesbury kept the product in hand for the times that reading the news was just part of the flow of picking up the paper, as well as when Whatever was vitally important was the first reason to pick up the newspaper. The longer that it is available but does not pass through your hands or before your eyes, the less you miss it.
    I want to believe, I’m ready to be pleasantly surprised, I just can’t see the mechanism yet…

  6. nyncboy says:

    and all it cost him was basically the change he had rumbling around in the console of his car

  7. kaleberg says:

    I got the impression, starting in the 1980s, that the New York Times was a real estate investment company that used its media assets to support its main operation. That’s when their news gathering and reporting started to weaken, but they started to become a lot more profitable as a company.

    The Washington Post was never a very good newspaper, except for a brief period in the 70s and into the 80s. They are mainly a trade journal for DC’s political class, like Variety for Broadway and Hollywood. You can get better, broader coverage from outlets like McClatchy, TPM or any number of other blogs. Bezos may just be buying a lobbying arm, not all that unlike Hearst’s in the last century. After all, insider DC policy is usually decided by who has the best cocktail weiners.

    Alternatively, he could hope to develop it into a serious news gathering operation and see if it can fit with his existing Amazon assets. For example, it could be linked to Amazon Prime, Amazon’s premium shipping and television network. I’m as curious as the next guy.

    • hankest says:

      I don’t know, i never read the WaPo until i moved to DC for a year in 2004. I was impressed, 35 cents, zippy the pin head on the funny pages, and it had some really, really good in depth reporting.

      I’d wager even Josh Marshall would agree that comparing the reporting at the WaPo to TPM (assuming you mean the Talking Points Memo) is plain absurd.

  8. Init4good says:

    If he or anyone wants to be successful in the news busyness’ all they need to do is do what newspapers or newsites have not done for 30 years. And that is report what is seen, heard, and said by real people, rather than ppl who are paid shills or those who tout
    the ideals of the corporatocracy. If he can do that, he’s a genius and will own a highly successful news outlet. We don’t have a popular free press now. Just bring it back and watch the millions get in line to buy it. Guaranteed.

  9. Init4good says:

    He can be successful by undoing what’s been done for at least the last 30 years – the silencing of the free. Report what the persons on the ground witness and let them tell the stories as they see them – honestly. Free the press from the corporatocracy, and get rid of paid shills – millions will get in line to read and see it!

  10. boveri says:

    Outstanding piece that says it all beautifully. In my book these were all knock-out punches:

    [D]espite all the opinionated bloviating online, there’s very little newsgathering going on online, certainly not when it comes to the big issues of the day…finance, politics and international developments. This is what newspapers do best.

    There’s no reporting at the TV station. Local outlets are all talking heads, models in a contest to air that which will get ratings. Cable outlets are not much better. And they and the networks take their talking points from newspapers. The “New York Times” might be struggling when it comes to income, but in terms of influence, the paper’s never been bigger, it’s a powerhouse. Because the “Times” has boots on the ground, and none of its competitors do…except for the “Wall Street Journal” and the “Washington Post.”

    That’s what separates the winners from the losers…information. He who has it wins. He who controls it has more power than any banker, any manufacturing titan.

  11. Chad says:

    I’m amused by all the talking heads saying he overpayed. Based on what? The number of gray haired Americans within 5 years of dying who are willing to pay for a physical paper? That industry is dead and gone. If you are basing your valuation off of that then every news organization not named Vice is worth ZERO $.

    Yet, of the old media companies left, only 3 are worth paying to read and Bezos just bought one of them. In 10 years people will get the worthless local news from the local source and national and international news from one of the only 3 places that actually do that. Do I want to read the Pittsburgh Post-Gazzette for what happens on WallStreet or in DC? No, because it will be lacking. It already is.

  12. [...] We really don’t know what Jeff Bezos will do to transform the news.  (Lefsetz Letter) [...]

  13. trish says:

    There is a fine line between corporate sponsorship and a corporate agenda. As a reader I refuse to pay for propaganda, ideology dressed up as the truth or stories of massive fat blobs in London sewers. Maybe the era of the newspaper baron is truly over, they simply can’t handle the truth or can’t deliver it without a heavy overlay of ideology subverting it. Maybe it’s time for newspaper cooperatives, where journalists operate as independent contractors with corporate propaganda confined to where it belongs in the advertisement section.

  14. [...] Bezos/Washington Post The Big Picture. “Paywalls are for pussies.” [...]

  15. Clif Brown says:

    Bezos will be able to succeed if he takes advantage of the fact that he is not beholden to anyone. The Sunlight Foundation was unable to find any significant political gift giving in Bezo’s history so he is an independent operator with the deep pockets to fend off the fears of advertisers about anything the might offend the powers that be in his newspaper. I’ve seen him referred to as a libertarian with a small “L”. Holy cow, this might mean a return of real journalism.

    NBC/CBS/ABC have been nowhere to be seen in national investigative reporting for a long time because they are the creatures of their commercial sponsors and eager to please Washington. The NY Times is as timid as can be when it comes to Israel. Should it honestly report about events there, there would be hell to pay.

    I subscribe to the NY Times but I am very tempted to switch to the Post. This is going to be something to watch. Maybe there is reason to hope, after the huge vacuum in hope created by Obama, the specialist in talking the talk while on the ground he has no shoes for walking it.

    So let’s go Jeff!

  16. [...] From Bob Lefsetz at The Big Picture: [...]