Did you know that Google (News - Alert) makes far more money selling ads than the New York Times does, and that Google has zero reporters versus the Times’ worldwide network of over 1,000 talented writers and reporters? No wonder most critics think newspapers are going the way of the dodo.
While Google exploits (they call it aggregating) the content that is out there and believes all content – books and articles -- should be free, Amazon founder Jeff Bezos is personally willing to pay for content.
Heck, he is paying $250 million to buy the Washington Post and some of its related companies and businesses. Bezos is buying almost the entire caboodle all by his lonesome – no connection to Amazon at all. Besides the Post, Bezos is getting a bevy of smaller newspapers, but surprisingly, Bezos isn’t nabbing websites Slate.com and TheRoot.com, or Cable ONE, an Internet and telephony provider.
The Post deal seems to fit much of Bezos’ mindset, as Amazon itself was based on the notion that consumers can, will, and probably should pay for content. In Amazon’s case, it has a healthy business in both electronic and physical books.
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Bezos’ Back Story
This TMC (News - Alert) author saw Jeff Bezos lecture at the Stanford Publishing Institute back in the 1990’s, and his knowledge of new distribution models was astounding.
So far, Bezos has given few details of how operations will run, except that he will stay in Seattle and let the existing team run the paper’s affairs.
But it is likely that Bezos will have some bold ideas to keep the content vital, and may pioneer some smart new ways to get that content to readers, something beyond the tablet and mobile content distribution schemes so common today.
In a letter to Post employees, Bezos offered both more of the same – and plenty of eventual change. “The values of The Post do not need changing. The paper’s duty will remain to its readers and not to the private interests of its owners. We will continue to follow the truth wherever it leads, and we’ll work hard not to make mistakes. When we do, we will own up to them quickly and completely,” Bezos wrote.
Bezos didn’t buy the paper to keep everything 100 percent the same. “There will, of course, be change at The Post over the coming years. That’s essential and would have happened with or without new ownership. The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. 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. Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there. I’m excited and optimistic about the opportunity for invention,” he added.
Newsweek or Newsweak?
Some Newsweek news broke the same time as the Washington Post story came out. IBT Media is buying the remains of the former weekly print magazine, which killed its print edition 7 months ago and went all-digital.
Newsweek was hosted under The Daily Beast brand, but the Beast is not part of the deal.
Interestingly, Newsweek was owned by the same Washington Post about to be part of Jeff Bezos’ personal portfolio. The Post, however, sold Newsweek for a mere one dollar (and all $40 million in liabilities, like already paid subscriber fees) to a group that included Barry Diller.
IBT didn’t disclose financial details.
The Boston Globe
All this newspaper news is breaking at the same time, with John Henry, the owner of the Boston Red Sox, announcing plans to buy the Boston Globe from its current owner The New York Times for $70 million, which actually wasn’t the largest offer. So how did the Times’ balance sheet fair in this? It bought the Globe 20 years ago for $1.1 billion. Ouch.
The New York Times also paid nearly $300 million to buy the Worcester Telegram, which serves Worcester, Mass., whose population is just 180,000. The Telegram is part of the Henry deal. Another ouch.
Meanwhile, ace investor Warren Buffet has been going around buying small newspapers, making us all wonder what these financials wizards see in these newspapers. Did they hit rock bottom and will they start to rise again? Is the content more valuable than the paper it’s printed on?
My guess is that the “print is dead” mantra is overrated, as consumers still love newspapers and magazines. Just look at how thick Martha Stewart Living and GQ still are.
There are two main schools of thought when it comes to content. One is to pay to have good stuff created; the other is essentially to steal it. Google sells ads against search results about things it had no hand in creating, and is even scanning and distributing books that are covered by copyright. And sites like The Drudge Report simply aggregate links and sells ads against them.
These approaches -- and especially Google’s -- have made it tough for organizations such as The Associated Press (News - Alert), which has been reporting for over 160 years. AP pays reporters, and then syndicates these articles, meaning partner newspapers pay to run them. That cash is then put into new and better reporting.
But that virtuous circle is a bit broken. Where the company used to have more than 4,000 employees, it now has just 3,200.
Several years ago, Google’s Eric Schmidt (News - Alert) addressed a newspaper gathering and argued that “the vast majority of people only want the free model,” and he suggested newspapers get used to that approach. He also told the newspaper audience that they should “understand what my readers want,” meaning that those that pay to develop the content should think first of those that consume it for free.
Edited by Rich Steeves
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