Jeff Bezos bought the Washington Post on Monday not because it’s a good business. Newspapers are a terrible business.
He bought it because as an Internet age mogul and a member of the New Establishment, he wanted a platform that would validate him within the Old Establishment.
A West Coast, self-made billionaire, he wanted East Coast, upper crust credibility. After all, you don’t get to buy the paper that broke Watergate very often. Which doesn’t mean it’s a good buy.
Just a very, very special bauble.
In buying the Post, Bezos joins a growing list of gimlet-eyed, self-made entrepreneurs who think that owning a newspaper is extremely cool and that there’s at least a chance they can turn it around.
Jared Kushner bought the New York Observer. Aaron Kushner (no relation) bought the Orange County Register. Facebook cofounder Chris Hughes (below) bought the New Republic.
But there’s no real evidence that they can turn these publications around.
Barry Diller and Sidney Harman couldn’t fix Newsweek. Sam Zell couldn’t fix the Los Angeles Times.
Can these new owners remake the antiquated business model of print, with all that paper and those presses? Do they have the stomach to slash the size of the newsroom staff, to remake the culture, to make everyone take photos, write headlines, tweet, text, do video and watch analytics?
None of these young billionaires have done so yet.
The Washington Post, which Bezos bought for $250 million, is a shadow of the newspaper that it used to be (and where I used to work). It is still one of the bastions of great journalism, and in the hands of the Grahams was a formidable watchdog of a secretive and hidebound government and its challengers.
But as a business? The Post – the newspaper – lost $53.7 million in 2012 and another $21.2 million in 2011.
That hasn’t stopped young billionaires with a taste for publishing from jumping in the choppy water. There are still billionaires like Eli Broad and Ron Burkle circling the Los Angeles Times. And Mike Bloomberg clearly has a taste to buy the New York Times.
This may not change the outcome for print.
“We know the movie. We know how it’s going to end,” Ava Seave, a professor of media strategy at the Columbia Business School told TheWrap on Monday. “It’s a much smaller business. No one makes any money. It will be a living, not a business. And a smaller and smaller one.”
"I do take these buyers at their word that they think sustaining an important journalism institution is worthwhile work, something interesting to do with their money," Rich Edmonds, a media business analyst at the Poynter Institute, told TheWrap.
In the case of the Post's new owner, Bezos has demonstrated a stomach for the long game while transforming Amazon into one of the leading forces in ecommerce. But it remains to be seen how long he will be willing to lose tens of millions of dollars a year to his new trophy paper.
Unless he really thinks he can change things. There’s more than a little Internet-age arrogance in these purchases of print companies whose business models are fundamentally challenged. (And by the way, wasn’t it the Internet that killed newspapers in the first place? I digress.)
Can Bezos do what Don Graham could not? Is he willing to do what it takes to fundamentally alter the dying business model of print?
Otherwise, he’s just another billionaire buying a bauble.
Brent Lang contributed to this article