Tuesday, August 6, 2013

Jeff Bezos and WaPo

“Let us hope that this is what the sale signifies: The beginning of a phase in which this Gilded Age’s major beneficiaries reinvest in the infrastructure of our public intelligence.” --James Fallows

Yes, yes, here we have Roger and his cup half full in all its splendor. It seems to me, however, that the recent buying trends of newspapers are the best thing to happen in our business in at least five years -- buyers taking newspapers private with the main motivation being something other than the expectation of high, unsustainable profits.

Obviously, any business must be profitable to survive. The rather obscene profits of the 20th century that transformed our business into a handful of publicly held conglomerates with shareholders demanding unsustainable 30-plus percent margins are forever a thing of the past. Reasonable, sustainable profits, on the other hand, are entirely achievable, even as the fundamental model has been destroyed and must be rebuilt.

Flawed as they were, the newspaper owners of a hundred years ago had similar motivations. In the case of WaPo, whose circulation has fallen by nearly 50 percent in 10 years, Bezos overpaid by a big number, even though the total accounts for about 1 percent of his net worth.

The emergence of people who believe in "reinvesting in the infrastructure of our public intelligence" is a positive turn of events. Seen in its best light, we have the recognition that local journalism -- and, in the case of the Boston Globe and Washington Post, regional and even global journalism -- is a fundamental foundation of a free society is, at the very least, encouraging.

Thirty years ago many of us were loudly complaining about the "corporatization" of newspapers and its negative effects on journalism. Instead of seeing the emergence of billionaires snapping up newspaper at bargain-basement prices as a bad thing, we should see it as a return to the days of more localized ownership by people who actually care about quality reporting and bringing local shoppers and sellers together.

Local journalism isn't out of the woods. Innovation needs to continue. No, it needs to accelerate. But newspaper managers haven't been sitting on their hands, as some like to claim. Innovation is happening apace. But innovation that weakens local journalism isn't progress.

Print is not as profitable as it once was, but it still generates nearly all the profits for local newspapers. The trend away from print and toward digital will continue, though there's plenty of evidence that it's slowing. There's very little danger that printing presses will be grinding to a halt any time soon. Instead, newspapers are running essentially parallel businesses in print and digital, despite real efforts to blend them.

My former employer, what was then called Thomson Newspapers, saw the downturn coming and sold its newspaper holdings more than a decade ago at exaggerated values. That company has gone on to make a lot of money in other businesses, headed by my former boss, once a reporter at the Canton Repository. Good for him and his company.

Now we see rich people buying newspapers as "trophies." Good for them and good for us.

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