From 1989 to 2013 traditional newspaper organizations lost 20,000 full-time jobs. From 1968 to 2014, the number of paid daily subscribers in the United States dropped by 20 million. Advertising revenue plummeted from $49.4 billion in 2005 to $19.9 billion in 2014. Surely, these statistics would spell doom for any industry. Yet, today, the traditional newspaper industry is still alive and in some cases, thriving. But, how can this be? One reason is: The Bezos Effect
It was Jeff Bezos, the owner and inventor of Amazon, his integrity, forward thinking and deep pockets, which saved the Washington Post from the grave and provided the industry with an example of success.
Why is true journalism worth saving?
Think about how Watergate and the Boston clergy scandal impacted our lives. These are two news stories of massive significance, of worldwide impact, which prove the indispensability of journalism (aka, The Fourth Estate), when it comes to holding the powerful accountable and protecting the vulnerable. Journalism is an integral part and a vital component of democracy. Journalism is the channel through which We the People speak to our leaders and through which they in turn speak to us. It must be free and clear of personal motive -- it must remain objective -- in order to be the protector of facts and the steward of truth, to provide the electorate with the information needed to make good decisions in the voting booth and at the checkout counter.
In 1972, The Washington Post published its Watergate story stating that aides to President Nixon were responsible for a break-in at the Democratic campaign headquarters. The story exposed crimes and brought down a presidency. In 2002, The Boston Globe published a devastating series by its investigative unit, the Spotlight Team, which proved that the Catholic Church had been abusing children for decades and getting away with it. The Globe uncovered a horrendous crime wave, exposed the machinations which perpetuated it, and freed tens-of-thousands of victims who felt vindicated and no longer alone. This time the power of journalism brought down a Cardinal.
Journalism clearly has its role in protecting our freedom, but given the devastating plummets in profitability since the advent of the internet, which robbed newspapers of their advertising revenue, and the current all-out assault on the industry's integrity, beckons the question: Who will protect journalism?
The Bezos Effect
An answer comes from Jeffrey Preston Bezos, digital visionary, founder and chief executive of the retail and technology giant Amazon, and, since 2013, owner of The Washington Post. It was Bezos who opened his checkbook so that the Post could reverse years of revenue losses. Bezos’s enormous wealth and his desire to use some of it on his newspaper, is a major factor in the turnaround for the Post, as well the news industry as a whole.
Over the five years leading up to Bezos’s takeover, the size of the Post’s newsroom had shrunk from over 900 full-time journalists to fewer than 700, revenues fell by 10 percent during the first three quarters of 2011, and profit was down 72 percent. The company’s newspaper division reported an operating loss of $9.8 million in 2010, $21.2 million in 2011 and $53.7 million in 2012. Yet, within two years Bezos moved the Post ahead of the industry leading New York Times in web traffic, tallying a 59 percent increase over the previous year.
“The people who meet with me here at the Post,” said Bezos, “will have heard me many times say we’re not a snack-food company. What we’re doing here is really important. It’s different. We’re not just trying to make money. We think this is important.”
Bezos’ success is based on three ingredients: outstanding journalism; a large and growing digital audience; and a strategy to convert that audience into enough revenue, through digital subscriptions and advertising, to cover costs and turn a profit.
“If you look at why Amazon is so different than almost any other company that started early on the internet, it’s because Jeff approached it from the very beginning with that long-term vision,” said Bezos’s friend Danny Hillis. “It was a multi-decade project. The notion that he can accomplish a huge amount with a larger time frame, if he is steady about it, is fundamentally his philosophy.”
Many of the strategies Bezos is pursuing at the Post are applicable to any newspaper. The following is a sum of his strategy broken down into 5 things that publishers can learn from how Jeff Bezos is running The Washington Post:
- There are significant benefits to private ownership: Bezos, as the sole owner, does not have to answer to shareholders or anyone else, and has the ability to invest as he sees fit.
- There is value in getting big: The Post is pursuing a massive digital audience, because by opening the top of the customer-engagement funnel as wide as possible, the Post has given itself a larger audience to try to move to the bottom of the funnel — the point at which increasingly engaged visitors are converted into paying subscribers to the Post’s website and apps.
- Do not pursue change for change’s sake: when Bezos took over the Post, he retained Martin Baron as the Post’s executive editor and Shailesh Prakash as the chief information officer and vice president of technology. Baron is a major asset. A headline in Esquire asked, “Is Martin Baron the Best Editor of All Time?” Baron’s prowess as an editor and high profile has made him an important part of the Post’s brand. Baron’s reputation grew substantially because of, ‘Spotlight,’ the Academy Award-winning movie which tells the story of how The Boston Globe under his leadership revealed the pedophile priest crisis within the Catholic Church, for which the Globe won one of its 11 Pulitzers under his leadership. Prakash as the CIO and VP of technology has a vision of licensing Post products to other newspapers.
- Technology is central to the mission: The Washington Post has: boosted the speed of its website and its various mobile apps; elevated the importance of design and layout of those digital platforms; developed personalized recommendation systems; fully engaged with social media; and offered a large amount of multimedia content with an emphasis on video. Technology software is used to build the audience. Bandito is a program which employs an algorithm that helps editors decide which headlines, photos and stories readers find most engaging. Loxodo is a tool which tracks how readers perceive the quality of Post journalism compared to other news organizations, as well as the speed, quality and quantity of mobile alerts. The Post also relies on a presentation for some types of material that is aimed at maximizing shares and eyeballs. The Post publishes a lot of material online — about 1,200 pieces a day — and a good deal of that never finds its way into print.
- Embrace change even when you can’t control it: The Post is publishing all of its content as Facebook Instant Articles and is providing its journalism to Apple News and as part of Google AMP (Accelerated Mobile Pages).
As Baron said, “We are doing things that are much more attuned to the digital environment” by “treating the web as a distinct medium.” Among the examples Baron cited: hiring young digital-native journalists who write with a distinctive voice and who are unconcerned as to whether their stories appear in print; embracing multimedia tools such as video, the publication of original documents, and annotation (presidential debate transcripts, for instance, have been marked up with highlighted comments by Post journalists). “I mean, look, radio is different from newspapers, television is different from radio. Here comes the web. We should be different, and mobile might be different, too.”
Where are the good journalists these days?
The deep pockets of Jeff Bezos has contributed to a renaissance in journalism and the Washington Post is among many traditional newspaper organizations which have upped their game. Though there are currently too many to name, the following journalists are exemplars of the trade:
Mike Rezendes of the Boston Globe and the Spotlight team are still releasing earth shattering exposes. Mike and the team were 2017 Pulitzer Prize finalists in the local reporting category for their series, “The Desperate and the Dead,” which exposed the dangerous failures of the Massachusetts mental health care system: https://apps.bostonglobe.com/spotlight/the-desperate-and-the-dead/
Shane Bauer of Mother Jones was awarded The Goldsmith Prize for Investigative Reporting from the Shorenstein Center on Media, Politics and Public Policy at Harvard Kennedy School for his investigative report, “My Four Months as a Private Prison Guard”: http://www.motherjones.com/politics/2016/06/cca-private-prisons-corrections-corporation-inmates-investigation-bauer/
The times call for information that We the People may rely on. A wave of concern for truth has arisen and it takes the dogged reporting of investigative journalists and the vision of a pioneer such as Jezz Bezos to protect the mission of The Fourth Estate to champion the vulnerable by keeping the powerful in check.
Author: Mike Emerton, Founder, BridgeView Marketing