By Paul Gillin | January 6, 2014 - 1:44 pm - Posted in Newspapers

North Adams Transcript Logo

Martin Langeveld is a 30-year newspaper publishing veteran who was for 13 years the publisher of several newspapers in Northwestern Massachusetts and southern Vermont. He also was executive vice president and director of interactive media for New England Newspapers, Inc., a four-daily cluster which is part of Denver-based MediaNews Group, Inc. He tipped us off last week to the impending closure of the 170-year-old North Adams Transcript, which he piloted for six years. We asked him for his thoughts, which he shared by e-mail.

Martin Langeveld

I started my newspaper career at The Berkshire Eagle in 1978, served as publisher from 1995 to 2000, then did a stint as publisher at the Transcript 2000-2006 and at the Brattleboro Reformer 2006-2008.

For about 85 years, from 1896 to 1979, the Transcript was owned by the Hardman family, which then sold the paper to the owners of the Boston Globe. The Berkshire Eagle at the time was owned by the Miller family, who had bought the paper in 1892. The two families had a friendly rivalry, but when the Hardmans decided to sell, they let it be known that they would not sell to the Millers — because they were afraid the Millers would simply merge the two papers.

The Millers unsuccessfully attempted an end run using a straw man, and then they tried again, without success, when the Globe put the paper up for sale 10 years later and sold it to American Publishing. The Millers sold to MediaNews Group in 1995, and MediaNews bought the Transcript from American Publishing a year later. A couple of years after that, Michael Miller, a third-generation member of the former publishing family, asked me why we hadn’t merged the papers yet — thus confirming the suspicions of the Hardmans. (In the early 1980s, the Millers had merged two other papers, The Torrington Register and the Winsted Citizen in Connecticut, into the Register-Citizen.)

It’s a fact that we ran the numbers in 1996 and concluded that the bottom line was marginally better keeping the papers separate versus merging them, but the deciding factor was really Dean Singleton’s passion for newspapering and his conviction that North Adams was a separate place from Pittsfield and should continue to have its own paper. He brought in a designer, we improved the looks and content, and restored the original, handsome Gothic name plate. Over the years, of course, a long series of small consolidation steps merged the business and production functions of the two papers, and the Transcript’s building was sold, to the point where a final consolidation became the simple step it now appears to be.

Since there was not a huge bottom-line advantage to separate operations back in 1996, I doubt if there’s much financial advantage to merger today. The North Adams office is being retained, as is the journalism staff. The sales staffs were merged long ago and the business office functions were consolidated in Pittsfield. There might be a few circulation positions eliminated. But on the other hand, more copies of the larger Eagle will have to be printed; deliveries will have to be made to all the same places; and circulation revenue will be lost to the extent there was duplication. Back in the day, you could raise advertising rates based on the circulation increase, but that pricing power is gone. There was some duplicated preprint advertising which will be lost.

So my guess is that the justifications for the merger consist of (a) less management distraction managing two different brands in the same market, and (b) the perceived opportunities in focusing on a single region-wide brand. Readers really will gain something since the two papers duplicated coverage on a lot of events, so the expanded Eagle staff can now cover more. (Hopefully there will be enough newshole available to print what they write.) 

The region — the Berkshires — is a brand in itself, which has always been a strength exploited by the Eagle. So the move announced at the same time (making the Berkshires Week supplement, published since 1952, a year-round standalone publication) is a smart one, especially if it’s accompanied by a good online strategy.

It’s understandable the names of the papers will not be merged into Eagle-Transcript. But I’ve suggested that the Transcript logo be retained in a small way as part of the Eagle’s editorial page masthead. The Transcript’s 170 years of publishing history should not vanish without a trace.

Read more of Langeveld’s wisdom at the Nieman Journalism Lab.
North Adams Transcript website.

By Paul Gillin | January 3, 2014 - 4:51 pm - Posted in Business News, Local news, Newspapers, R.I.P.

NorthAdamsTranscriptThe North Adams Transcript, a daily fixture in northwestern Massachusetts since 1843, will be merged into the larger Berkshire Eagle later this month. The Transcript name will be discontinued and its five-person full-time editorial staff will join the Eagle. A sister weekly newspaper, the Advocate, will also be folded.

While putting the usual happy face on the announcement, management did provide a rationale for the move: “Publishing two daily newspapers that cover the same market – literally, they overlap – no longer makes sound business sense when one accounts for the duplicate efforts and redundancy in the processes involved in producing, delivering and servicing two newspapers that share the same mission,” wrote Publisher Kevin Corrado and News VP Kevin Moran in a joint message to readers.

The Transcript is  one of four Massachusetts newspapers owned by MediaNews Group of Colorado, which is one of the largest newspaper publishers in the U.S. The company is known for its practice of buying multiple newspapers in the same region and centralizing production, ad sales, business operations and even editorial operations to cut costs. Some former staffers have complained that MediaNews sacrifices journalistic quality for the sake of profits.

In this case, however, the merger probably make sense. The Berkshires are the most rural area of Massachusetts, and with readership declining across the industry the wisdom of maintaining overlapping titles would be questionable. Fortunately, no reporting jobs were lost.

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Final print edition of The Onion

Final print edition of The Onion

It is neither major, metro nor daily, but we would be remiss in not marking the passage from the world of the printed page of The Onion, which has long borne the self-effacing tagline of “America’s Finest News Source.”

Founded by two juniors at the University of Wisconsin–Madison in 1988, the satirical journal has thrived online with its diet of satirical news stories written with such deadpan earnestness that The Onion’s entry on Wikipedia lists more than 15 prominent cases of third-party sources citing it as a legitimate news outlet, usually to their embarrassment

Unlike many newspapers that have left the print world, The Onion is merely following its overwhelmingly young and Web-savvy audience. The paper became international phenomenon when it hit the web in 1996 and traffic to theonion.com reportedly now averages 7.5 million unique visitors per month. Its YouTube channel has 670,000 subscribers and The Onion has been liked on Facebook 3.2 million times.

The Onion has been gradually withdrawing from the print market for years. Its last remaining print editions – which were in Chicago, Providence, and Milwaukee – published their final copies last week. Not surprisingly, they were a tribute to the durability of print. Headlines included: “‘ONION’ PRINT REVENUES UP 5,000%,” “Nation Just Prefers Feel Of Newsprint In Hands” and “Experts: Digital Media Revolution Still Another 70 Or 80 Years Away.”

We were subscribers to the print edition of The Onion for several years and keep its RSS feed in our carefully curated list of media sources. We still have trouble reading it without the milk coming out our nose.

 

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By Paul Gillin | November 27, 2013 - 6:47 am - Posted in Newspapers

ImageJeff Bezos (right) may be the most prominent rich person to buy into the newspaper industry recently, but he’s not the only one. Billionaires have been opening their checkbooks with astonishing frequency lately to invest in an industry that many people think is dying.

Warren Buffett owns more than 60 newspapers and says he’ll buy more. Billionaire Boston Red Sox owner John Henry just ponied up $70 million for the Boston Globe. Serial entrepreneur and multimillionaire Aaron Kushner bought the Orange County Register a year ago and has been plowing money into reporters and circulation. There’s evidence that the strategy is paying off.

What do these savvy investors see that others don’t? I think three things.

Value. At a basic level they see business opportunity. Henry purchased the Globe for just 6% of what the New York Times Co. paid for the newspaper 20 years ago. Media properties are so beaten down right now that value investors see nowhere to go but up. Newspaper subscribers still have some of the best demographics of any audience. More than half earn more than $50,000 a year and 22% earn six figures or more, according to the Newspaper Association of America (NAA).

Although the audience is dwindling, more than 60% of US adults read a newspaper in print or online each week, according to the NAA. There are more ways to monetize that audience than just advertising, and these new investors are the kind of out-of-the-box thinkers who will figure them out.

Market Stability. Mainstream media plays a critical watchdog function that greases the wheels of democracy and commerce. Reporters pounding the beat at city hall and scrutinizing the records of regulators keep public officials honest and playing fields level. They also provide valuable intelligence on competition.

The press corps at some state capitols has been drawn down so much that some legislators have actually complained they miss the repartee with journalists. That has to alarm anybody who has millions invested in the market. Most rich people don’t care who’s in office as long as they know someone’s keeping an eye on them. And by the way, Bezos, Henry and Buffett  were avid newspaper readers long before they were media tycoons.

Trust. The great paradox of the newspaper industry bust is that readership of newspaper content is at an all-time high in the U.S. The problem isn’t the product, it’s the business model. Media democratization has been a great thing, but it’s also created a crisis of trust. We are less and less confident in who to believe.

Trusted media brands have a vital role to fulfill in this regard. We trust them to sweat the details and nail down the facts. Misinformation flourishes when everyone is the media, as we saw in the Boston Marathon bombings and Hurricane  Sandy. Mainstream media is expected to be accurate, at least most of the time. That’s why we instinctively turn to them when messages conflict.

I don’t want to imply that the actions of these super-rich investors are entirely altruistic, but smart people know a developing crisis when they see it. Trusted media is too important to the functioning of our society to be allowed to just die on the vine. If Jeff Bezos can put up 1% of his net worth to rescue the Post from disaster, he hasn’t sacrificed much.

Fumbled Opportunity

The newspaper industry has fumbled for a solution to its problems for decades with little to show for it. That’s mainly because the wrong people were in charge. Newspapering has traditionally been a stable, profitable and boring business, characterized by monopoly or duopoly markets, high subscriber loyalty and advertiser lock-in. The people who flourished in that environment where bean counters who knew how to wring costs out of an operation.

When the industry entered walked off the cliff in 2006, these people did what they knew best: Hacked away at expenses. But you don’t cost cut your way out of a fundamental shift in your market. Until just a couple of years ago, newspaper still earned 80% of their revenue from advertising, a business that has been in freefall for years. They’ve done a terrible job of diversifying their revenue streams, although some are beginning to turn the corner.

The Washington Post is a microcosm of the industry’s troubles. The paper was one of the first to go online in the pre-Web days, but it chose to build a proprietary platform that was quickly rendered obsolete. The Post has failed to come up with a workable way to derive more revenue from readers, as The New York Times has done. Many staffers reportedly sneered at The Politico when it launched in 2007. Today, it’s a must-read on Capitol Hill

The Washington Post Co. has diversified its business but failed to invest aggressively in new-media opportunities. The company’s Kaplan education division actually contributes the majority of its revenue and profit, but WaPo has been unable to duplicate that success in other markets.

Its most famous misstep was when CEO Donald Graham failed to pursue a 2005 handshake agreement to invest $6 million in a fledgling social network called Facebook. Accel Partners got the deal instead. Had Graham pressed his advantage, the Post’s stake could be worth $7 billion today, wrote Jeff Bercovici in Forbes.

But why invest? Newspaper owners have never had incentive to be aggressive. The industry has rewarded caution and conservatism, and that’s a big reason why it’s in such a mess today. The good news about the arrival of wealthy entrepreneurs on the scene is that they have nothing invested in the way things used to be done. People like Jeff Bezos are set to break the rules, and that’s exactly what the industry needs.

This article originally appears on Social Media Today.

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Brian Stelter“There is no longer a defined final destination for talented journalists,” writes Emily Bell in The Guardian. “The New York Times is surprised to find itself a stepping stone.”

Bell is writing about the sudden and surprise defections of a number of top Times journalists to other media outlets, often for substantial amounts of money. The Times lost three prominent editorial staffers in one day last week: Brian Stelter (right) quit to go to CNN, Sunday editor Hugo Lindgren is off to places unknown and chief political correspondent Matt Bai will join Yahoo News. Last month, gadget specialist David Pogue left to go to an unnamed Yahoo startup. In an unrelated move, Jay Rosen has also joined an unnamed startup founded by Pierre Omidyar of eBay fame.

All of a sudden media is cool again, or at least some media. While traditional publishers continue to struggle with declining revenue, money is flowing into new media companies. Buzzfeed has raised $46 million. AOL is investing in a big overhaul and expansion of Engadget. Snapchat just turned down a $3 billion offer from Facebook, indicating how frothy the social networking market has become. B2B community Spiceworks has raised more than $50 million for its novel media model that uses software and a community as delivery vehicles. Even the Washington Post is expected to get an infusion of cash from its new owner, Jeff Bezos.

This is translating into career opportunities for some accomplished journalists whose brands now arguably transcend the publications they work for. Bell suggests that the star-making apparatus of the media world is shifting in their favor. Not long ago a job at The New York Times was considered the ultimate career plum for news journalists, but belt-tightening has hit the Old Gray Lady just as it has everywhere else (although not as hard). With all-digital operations suddenly flush with cash, the appeal of working for publishers whose survival strategy is to wall off content from non-paying visitors is diminishing.

In many ways, traditional media companies dug themselves into this hole. In their rush to produce more content and add more advertising inventory, they turned some of their best reporters into rock stars. Thanks to blogs, video podcasts and branded talk shows, journalists now get unprecedented visibility. That makes them prime targets for new media firms who want to trade on their personal brands.

Turnover may also be an unplanned consequence of paywalls, which will soon be in place at 41% of US newspapers. The problem with paywalls is that they shut readers out, and readership is what journalists live for. The Times‘ famous Times Select paywall was abandoned six years ago in large part because the paper’s signature columnists complained that their readership had evaporated. The models have improved since then, but no paid-access plan comes without some loss of audience.

So while newspapers  erect barriers to readership, new media entities like Buzzfeed figure out novel ways to get people to share their sponsored content. Is it any wonder that ambitious journalists with growing personal brands are seeking opportunities to spread their work to wider audiences instead of hiding it behind credit card forms?


Even reporters who don’t have million-eyeball reach may have new ways to monetize their audiences. A startup called Beacon has launched a service that enables journalists to derive revenue from their most loyal fans and share a little bit of the spoils with fellow contributors. Mathew Ingram sums up the model succinctly:

Each of the site’s journalists (there are currently about 50) has a page where their content lives, and a discussion forum. When someone subscribes to them for $5 a month, Beacon takes a cut — the amount is in flux, but writers keep around 60 percent on average — and then the reader gets access to all of the site’s other writers. Some of the proceeds from each subscription also go into a pool that is shared by all of the journalists on the platform.

It doesn’t sound like anyone will get rich from this business, but at least there is a direct correlation between work and reward. And we suppose Beacon could be a launchpad for a few new superstar journalists who build their audiences there. Like the crowd funding site Kickstarter, Beacon builds and manages the community. It’s then up to the participants to give the audience something of value. May the best journos win.

 

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By Paul Gillin | October 1, 2013 - 7:44 am - Posted in Business News, Newspapers, OnlineMedia

Lloyds List 1741We usually focus news of comings and goings on this site solely on major metropolitan dailies, but we’ll make an exception for Lloyd’s List, which claims to be the world’s oldest daily newspaper and which is going out of print at the end of this year. The paper, which originated as a list of ship arrivals, departures and casualties that was posted on the wall of Edward Lloyd’s coffee shop in London in 1734, canvassed readers in June and discovered that fewer than 2% of them read the print edition any  more. Management sounds upbeat about the transition to all-digital, which has been in the works for several months. “The digital approach offers new avenues and opportunities to innovate an up-to-the-minute service that offers in-depth news and information on every aspect of shipping,” said editor Richard Meade in a quote in the Guardian. See the links below for additional coverage. Jolly good.

For you history buffs, Google has digitized about 85 years of Lloyd’s List, beginning in 1741.

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By Paul Gillin | September 28, 2013 - 10:45 am - Posted in Business News, Newspapers

To no one’s great surprise, management and leaders of four unions at the  Newark Star-Ledger reached an 11th-hour agreement on a new four-year contract that will save the 171-year-old daily from shutdown. After two weeks of intense negotiations, which culminated in a 48-hour around-the-clock bargaining session, negotiators said they reached a deal that involved sacrifices on each side. No details were released, but Ed Shown, president of the Council of Star-Ledger Unions, said management got most of the $9 million in cuts it was seeking. Union members will vote to ratify the contract next week.

Star-Ledger executives had little to say, but in reading between the lines of what union negotiators said, we can assume that the unions got the worst of this deal. Management’s original proposal had demanded a 55% cut in wages and benefits, which union leaders said was outrageous. Management sought $9 million in annual savings on labor expenses, saying that was equivalent to the amount it could save by outsourcing production entirely. The Star-Ledger lost $19 million last year and is on track to lose that much money again this year. It’s hard to understand why cutting those losses in half is considered an accomplishment, particularly since owner Advance Publications has been hacking away at expenses across its portfolio of titles.

We expect the drama isn’t over yet in Newark. With an unemployment rate of 10.2% and household income that’s one-third lower than the national average, the economy in New Jersey’s largest city doesn’t offer the paper’s management a lot of options.

 

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By Paul Gillin | August 19, 2013 - 9:50 am - Posted in Business News, BusinessModel, Local news, Newspapers, Paywalls, Solutions

The San Francisco Chronicle is removing its paywall after just four months and the Dallas Morning News plans to follow suit. Observers are speculating that this could be the end of the nearly two-year-old binge that has seen more than one-third of U.S. newspapers erect barriers to their online content.

Neither company is abandoning the idea of gated content entirely, but both are reportedly pursuing new models based on premium services. That’s basically a reversal of the paywall formula. The premium-service model is aimed at monetizing a small part of the audience while a paywall denies service to everyone except those willing to pay. We think this amounts to a concession from both papers that paywalls are ineffective in their geographies.

San Francisco is a particularly tough place to make a paywall work, with its abundance of media and its tech-savvy audience. Also, the Chron isn’t exactly The New York Times of the west coast. In our view, it was a mediocre newspaper before cutting more than half its staff over the last few years.

All the Chronicle content will now be available on SFGate.com. What content will remain paid? A vaguely worded message from the new publisher and president said the paid SFChronicle.com site “will continue to provide readers with an online version that replicates a newspaper experience and reflects the changes in the news throughout the day.”

Replicating the newspaper experience online is a non-starter. We assume they’re working on better ideas.

The premium content model that the Chron and Dallas Morning News reportedly hope to implement is difficult to pull off. It has worked for ESPN, Cooks Illustrated, Consumer Reports and a number of financial publishers, but we’re not aware of any successes in the general news market. The premium model works best with investor audiences or those who are passionate, affluent and have an insatiable thirst for knowledge about a topic. None of those characteristics applies to local news.

It could be that San Francisco and Dallas are just early indicators that paywalls are not a good strategy for most newspapers. If so, we’ll know soon. Many publishers are coming up on their first year of experience, and they’ll have both the data and the experience to make a decision.

Bezos-Watching

Jeff Bezos

If you need any further evidence that Jeff Bezos is the Lady Gaga of media-watching, look no further than this roundup on Nieman Journalism Lab. Everyone is speculating about what the Amazon.com founder plans to do, but Bezos himself is offering few clues. We didn’t read everything Nieman’s Mark Coddington found, but we did peruse a few analyses.

A profile in The New York Times highlights the paradox of Bezos’ interest in being a media magnate, given that Amazon is an extremely secretive company. “There are fewer leaks out of Amazon than the National Security Agency,” write David Streitfeld and Christine Haughney.

What little we know of Amazon comes from its famously vague quarterly analyst calls. Outsiders are rarely permitted to tour its buildings and even its own executives don’t know where all its data centers are located. Bezos himself makes few public appearances and keeps a low profile in his hometown of Seattle.

So why does he now want to carry the First Amendment flag in our nation’s capitol? Ken Doctor sees three reasons why he and other super-rich people are buying into newspapers: Low valuations, a call of duty and the hubris to believe they can turn around an industry everyone thinks is dying. Also, no one else is willing to do it. “The few remaining people with the stomach to run daily newspapers have bank accounts with at least nine zeros after a non-zero numeral of some kind,” he writes at Nieman.

Kudos to Doctor for reminding us of EPIC 2014, a vaguely creepy spoof video made in 2004 that forecast the emergence of a media Death Star created by the merger of Amazon and Google in 2014. Some of the parallels are striking (watch below).

Writer and futurist Tim Carmody says he’s studied Bezos for years and believes the Amazon founder is driven by a fascination with the future and the urge to leave something behind other than the company he runs. Carmody also has interesting details about the sale of the Post, which appears to have been more a coincidence than a plan. “By all accounts, Bezos did not go looking to buy a newspaper,” he writes. “When he was approached by his friend Donald Graham about buying the Post, he initially begged off considering it.” It was Graham who pushed the deal more than Bezos sought it.

A few consistent threads run through the accounts we read. One is that Bezos is intensely focused on customer experience. The Times relates the story of how Amazon stationed ambulances outside its Allentown, Pa. warehouse during a heat wave rather than turn up the air conditioning or reduce the workload for its employees. Meeting shipping deadlines was more important than the health of its notoriously overworked fulfillment staff.

A second is that Bezos is a long-term thinker who aims high. Whereas many entrepreneurs would have been satisfied to build the world’s largest online bookseller, Bezos has set his sights on becoming an infrastructure powerhouse that can deliver goods and services physically or virtually anywhere in the world. The newspaper industry could benefit from this kind of vision right now.

The third is that Bezos is an unpredictable experimenter who disdains the status quo. It’s a given that he will ruffle feathers among his conservative colleagues in the publishing ranks. Again, not a bad thing.

There are also conflicts of interest that will merit scrutiny. The biggest is Amazon Web Services, a contract data center operation that hosts thousands of large research and commercial entities, including more than 500 government institutions. It’s Amazon’s fastest-growing business, and the government market is a huge opportunity.

Will Bezos be able to balance his dual role as free press agitator and major government contractor? Most people seem to think so. As the Times’ headline summed up:  “Expect the Unexpected.”

 

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By Paul Gillin | August 9, 2013 - 7:59 am - Posted in Business News, Local news, Newspapers

Several news outlets are reporting that AOL will shut down one-third of its Patch network of hyperlocal news sites and lay off about 300 people today. Newsday says AOL will close about 300 of its 900 sites and TechCrunch says layoff totals could reach 550. It’s unclear how large the Patch workforce is, but the last figure we saw was about 900.

A lot of reasons are being cited for Patch’s failure to get traction, ranging from competition from local newspapers to a crummy content management system. “Patch has gone from being free-wheeling to overly controlling with its local editors and then back and forth between the two,” writes TechCrunch’s Alex Wilhelm.

Our local Patch is run very well. Susan Petroni, a former daily newspaper reporter, covers the town so efficiently on a shoestring budget that her Patch site regularly scoops the local daily newspaper. However, the site is an unholy mess to look at, with ads and editorial content intermingled with each other seemingly at random. And Petroni’s discipline may not be typical. See  the comment titled “A PATCH INTERN’S STORY” on Romenesko for a more cynical view.

Patch has been dragging down AOL earnings since it launched, and CEO Tim Armstrong has pledged to make the network profitable by the end of this year or shut it down. It looks like this is a last-gasp effort to break even.


Update: Bloomberg BusinessWeek reports that AOL will replace the head of the Patch divison and close or find partners for 400 of its community websites. The exact number of layoffs is still undetermined, but it appears it will be at the high end of the 300-550 positions that were rumored earlier today.

 

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By Paul Gillin | August 6, 2013 - 11:51 am - Posted in Business News, BusinessModel, Journalism, Newspapers, Solutions
Image representing Jeff Bezos as depicted in C...

New media tycoon Jeff Bezos (Image via CrunchBase)

History may well mark the typically somnambulant first days of August as the week that forever changed the U.S. newspaper industry.

In a stunning sequence of events, two young billionaires with no media experience bought iconic East Coast newspapers and affirmed their commitment to helping to rejuvenate an industry that has been in freefall for the past seven years.

The Washington Post Co. announced yesterday that Amazon.com founder Jeff Bezos would buy the company’s namesake newspaper for $250 million, ending eight decades of stewardship by the Graham family. The news came just three days after billionaire commodities investor John Henry was announced as the new owner of the Boston Globe.
The news continues a trend toward deep-pocketed investors making substantial investments in news organizations, shoring up depleted reporting staffs and experimenting with new business models. Value-investing icon Warren Buffett has snapped up more than 60 dailies and says he plans to buy more. In Southern California, greeting card magnate Aaron Kushner and his partners at Freedom Communications are turning heads with an aggressive investment strategy at the Orange County Register that is showing early signs of bearing fruit.

This is the best news the newspaper industry has had in years, and we think the management styles of these investors symbolizes the kind of long-term view that the business badly needs.

Long-Term Vision

Why Billionaires Are Trying to Rescue the Newspaper Industry

Let’s look at the two newest arrivals on the media scene. We’ve watched both Henry and Bezos with interest for years, but for different reasons. Henry is the white knight who rescued our hometown Boston Red Sox from a tumultuous management struggle and brought the town its first World Series victory in 86 years. Bezos is an Internet pioneer who steered his company to greatness in a turbulent industry and forever changed retailing. The two men made their fortunes in very different industries but share a commitment to long-term vision and a belief in fundamental values.

Fenway Park, home of the Boston Red Sox, Bosto...

When Henry took over the Red Sox in 2002, the team was actively negotiating to abandon Fenway Park and build a new stadium in the suburbs. The new owner promptly scuttled the negotiations and redoubled his investments in the team’s home field, shoring up the infrastructure, adding seats and experimenting with new revenue sources that would keep the team competitive with other big-market players. The strategy has paid off. The 101-year-old stadium is a huge tourist draw, and high ticket prices combined with innovative promotions have enabled the team to support a payroll and farm system that consistently keeps it at the top of the American League East. Fans complain about ticket prices, but they can’t complain about the team’s performance on the field.

Bezos was one of hundreds of online booksellers that jumped on the early Internet. He successfully steered Amazon through the ravages of the dot-com crash and intense competition from brick-and-mortar retailers to make it a $61 billion powerhouse that has changed the way Americans shop. Bezos has kept his focus on core principles like personalizing the shopping experience and delighting customers. He has resisted the urge to chase short-term opportunities and focused instead on big picture problems like chipping away at the cost and frustration of shipping. See Michael Moritz’s profile for a financier’s account of Bezos’ brilliance.

Amazon made some early missteps, such as investments in busted Web 1.0 startups like Pets.com and Kozmo.com, but it has executed almost flawlessly since the end of the dot-com bubble. It has sacrificed profitability for growth, but that hasn’t stopped the stock from rising ninefold over the last five years. With Amazon still under-performing in international markets and just beginning to crack the business-to-business opportunity, there is reason to believe its best days are ahead of it.

Rule-Changers

Long-term thinking as exemplified by Henry and Bezos is exactly the tonic the newspaper industry needs. Its woes are rooted in a merger binge that started in the late 90s, fueled by an appetite for short-term profits. As online competition has eaten away the circulation and revenue base of the U.S. industry, most publishers have responded by cutting costs, raising prices and hoping for the best. But you don’t transform an industry by cutting costs. You do it by changing the rules. Bezos and Henry are rule-changers.

Editor & Publisher reported last week on newspapers that are successfully experimenting with new revenue sources. We have long maintained that growth opportunities exist  for publishers in local markets if they can break their advertising addiction and partner with businesses in new ways. Wouldn’t it be nice to see the Post and the Globe blazing these trails?

It’s tempting to dismiss these relatively small investments (the $250 million purchase price of the Post represents just one percent of Bezos’ net worth) as low-risk bets by people with money to burn, but we think there’s more to it than that. Wealthy entrepreneurs know that healthy, independent media are essential to democracy and to capitalism. Media watchdogs keep government and regulatory excesses in check and ensure that markets operate predictably. They also provide business intelligence that isn’t easily available elsewhere. Both Henry and Bezos are avid newspaper readers.

We have no reason to believe that either of these new media owners has any plans to try to wring cash out of a dying business. On the contrary, Henry was quick to issue a statement affirming his belief in the importance of a healthy Globe to the region. Bezos is leaving the current Post leadership in place and said no layoffs are planned. “The values of the Post do not need changing,” he said. “The duty of the paper is to the readers, not the owners.”

Some people have speculated in recent years that the salvation of the newspaper industry would be donations from foundations and wealthy investors. Perhaps there’s some truth in that, but donations are a backhanded way of saying that a cause can never support itself. Warren Buffett, John Henry and Jeff Bezos all have their own philanthropic interests, but we don’t believe they see these newspaper investments as charity. They see value, growth and ultimately something  that has eluded publishers for the last several years: profit.

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