You want proof that print is a dying breed? Just look at the trends: these days, the only people who can afford to run a newspaper are giant corporate moguls like Amazon CEO Jeff Bezos, Warren Buffet (whose company, Berkshire Hathaway, recently purchased 30 local newspapers), and Red Sox owner John Henry (who recently bought the Boston Globe).
It’s like how owning a ranch is now something only rich people with high-paying day jobs can do as a fun side project. Newspapers have become a nostalgic pastime.
Of those billionaires and their newspaper deals, Jeff Bezos’ purchase of the Washington Post is the most notable because it’s the most bizarre. Who could have seen it coming? As TechCrunch pointed out, it was just last year that Bezos told the Berliner-Zeitung that in 20 years, print newspapers will be extinct and no one will be paying for news. And for God’s sake, what newspaper experience does Bezos have?
Bezos doesn’t have any newspaper experience, but he has boatloads of media and content experience, having successfully established Amazon Studios and several publishing imprints. And that seems to be the popular theory—that Bezos bought the Washington Post to make some kind of Kindle/WaPo mashup.
It makes sense. Why not compete with blogs on their own turf? Take the Post digital and make its content free and exclusive on the Kindle, and poof, you’ve got original content and a leg up on the competition—not to mention the archives and the prestige.
But if that were the case, why didn’t Amazon buy the Washington Post? It certainly has the cash on hand. $250 million would’ve been a drop in the bucket. It’s certainly made bigger purchases. Just last year, it bought Kiva Systems for $775 million, and the year before that, it bought Quidsi for $545 million.
To be fair, there could be some hidden strategy here that required Jeff Bezos purchase the Post instead of Amazon, but how likely is that?
Sure, there could be a Kindle tie-in somewhere, but the Rich Man Game that newspapers have become lends itself to a more personal motive. Jeff Bezos is known to be a voracious reader and has said in the past that he reads several different newspapers. And of course, Amazon was founded as an online bookstore. Bezos has a passion for the written word. Let’s not forget that he personally led a $5 million investment in Business Insider earlier this year, which resulted in an expanded team and more coverage.
As analyst Ken Doctor theorizes, billionaires are being drawn to newspapers for three reasons: financial bet (buying at the bottom of the market), civic values, and ego.
All of these make sense in Jeff Bezos’ case.
1) Jeff Bezos took a loan from his parents and office space in the garage of his rented house and turned it into Amazon. He knows how to buy at the bottom of the market and turn a venture into a homerun.
2) Bezos is politically active—and not just when it comes to issues that impact Amazon. Last year, Jeff and Mackenzie Bezos donated $2.5 million to support a referendum to legalize gay marriage in Washington. Bezos has also donated money to several Democratic candidates, including Senator Pat Leahy of Vermont and Representative John Conyers of Michigan.
3) If anyone knows how to operate on razor thin margins, it’s Bezos. He has every right to see himself as the messiah of the newspaper industry, come to deliver us all from our print purgatory.
But that second point brings up another possibility.
“I think that Bezos’ influence in Washington will naturally rise as a result of owning such a prestigious paper,” said analyst Jack Gold of J.Gold Associates. “Could this mean a run for office? Possibly. You have to wonder what’s next for him (not that he is done with Amazon), and political office could be next.”
It seems far-fetched, but so was the Governator.
That’s not to say that Bezos will use the paper as his own personal political platform. You could probably expect that of Rupert Murdoch, but Bezos is smarter than that.
Buying the Washington Post will give Bezos an instant political network. It may give Amazon more leverage when it comes up to bat on issues like the seemingly resolved online sales tax quandary.
“Amazon needs more friends in D.C., and it’s hard to imagine what’s better than owning the editorial page of the Washington Post in that quest,” said Ken Doctor.
Does a personal or even political motive mean that Bezos won’t do his damnedest to unsink the Washington Post ship? Of course not. It seems like a virtual guarantee that Bezos will transform the paper into a free, all-digital publication. Who knows, maybe it’ll even become a part of your Prime subscription.
Whatever Jeff Bezos’ motives are, he’s unarguably the best person for the job.
Image source: turner.com