As a librarian, I'm concerned about the future of the news industry. As a citizen, I'm really concerned about the future of the news. We need a strong press and we need serious reporting. I had mixed feelings when I heard that Jeff Bezos was buying the Washington Post. In the mix were shock, concern, and . . . well, hope.
One of the strangest things about Mr. Bezos’s career is that he seems to have hypnotized shareholders into sitting back and letting him reinvest any profits from the money that flows through Amazon’s portals back into building a bigger, more dominant company. This runs counter to the typical modern business practice of wanting profits this quarter, the future be damned. Shareholders (and the Wall Street gnomes who wield the levers) seem to be patient so long as Bezos uses everything earned to secure greater market share of more markets.
Of course, shareholders may someday grow impatient at the time it takes to overcome the competition. One small example: Amazon's book prices were creeping up, presumably a sign that they had bested the competition and no longer needed to practically give away books to attract customers. Then Overstock started competing on book prices aggressively, and Amazon’s book prices plummeted overnight. All Wal-Mart has to do is drive local stores out of business to capture a market. Amazon has to step over the bodies of local bookstores to take on eBay, Google, and every other tech behemoth that can afford a price war.
Meanwhile, Bezos has done something that Wall Street rarely permits. He experiments. He invests. He doesn’t worry about the next quarter. He buys and builds his way to enhancing a brand that has enormous potential - and somehow gets away with the heretical idea that potential is worth something.
This kind of entrepreneurial patience is something the news business needs badly right now.
Newspapers haven't fared well in recent years. Newsroom layoffs nationwide have shrunk the news staff by nearly a third since 2000. The advertising revenue that used to pay for reporting has dwindled, with digital ad revenue much lower than print, and a huge percentage of digital ad dollars now flow to Google, which has captured so much of the market for digital advertising it has the Goliath status that Amazon has achieved for retail sales. Circulation, which was a smaller revenue stream than advertising, can’t make up for the loss even as news websites increasingly adopt paywalls to meet their bills.
What’s easy to forget amidst all the bad news about news is the fact that newspapers were incredibly profitable for a very long time. Up until the financial crisis, they had profit margins topping 25 percent. But these were profits without much of a future. The main strategy for dealing with eroding income was to cut costs. Since the news, like education, depends on the work of human beings, there is only so much cutting you can do without seriously harming the enterprise, and there’s evidence that the cuts have been too deep and the resulting skimping on news gathering is eroding the audience.
What this purchase may mean is that a man who has his eye on long-term strategies has just cast a vote for the future of the business by acquiring one of our most distinguished and important newspapers. He gets digital. He pays attention to what customers want. He’s willing to invest, and he’s willing to wait while a business grows.
The news business needs faith its own value and its future right now more than it needs quarterly profits. It needs to find a vision for the future that is something other than death of a thousand cuts. If Jeff Bezos can make his personal investment in the Post a long-term strategy for building on its strong brand and getting readers the quality journalism they crave, he’ll be doing us all a favor.
In some ways, this rosy outlook is difficult for me. I rarely shop at Amazon. I know many booksellers personally and their place in the ecology of books and reading is precious to me. I’ll put my book dollars, such as they are, into their hands because they are no more interested in quarterly profits than Bezos is, but they don’t have any designs on world domination and don’t treat their employees badly (unless the uncompensated hours they put in themselves count). I am troubled by Amazon’s vast reach and by Jeff Bezos’s global ambition. But his approach to making big gambles on big visions may be just what the journalists who bring us the news need right now. I wish them and the Post's new owner luck.