What Jeff Bezos means for Dina Pule
IF newspapers are dying, why are some of the world’s richest tycoons spending millions to get their hands on them?
Perhaps the oddest deal this week was Amazon founder Jeff Bezos — a totemic symbol of the digital age — forking over $250million to buy the Washington Post company, an equally iconic symbol of deadwood media.
At the same time, the industrialist who owns the Boston baseball team The Red Sox, John Henry, bought the Boston Globe, perhaps the best US regional newspaper, for $65-million. It’s a rich trend: Warren Buffett now owns 60 newspapers.
So why do this? Sure, they’re strong brands, but how much money can you make in a world where Google is sucking up every online advertising cent?
Newspaper advertising certainly isn’t healthy. A graph from the Newspaper Association of America shows that print advertising dropped to $18.9-billion last year — the lowest level since 1950, if you adjust for a constant currency. More galling is that only 12 years before, it hit a record $65-billion.
You might say that this isn’t necessarily a problem, as long as news moves to the internet. The problem is, despite thousands of “news” websites, online advertising only amounted to $3.37billion last year — less than a quarter being spent on far fewer print publications.
Harvard’s Nieman foundation says there are three reasons why people like Bezos invest in newspapers: first, they believe they’re buying at the bottom of the cycle and advertising will recover; second, the ego involved in being a newspaper baron; and third, a sense that you’re defending a crucial arm of democracy.
It’s the last of these that speaks to why we should be damn thankful for people like Bezos.
Website Newspaperdeathwatch.com says “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”.
Sure, there’s a lot of news not worth paying for. Many local newspapers run rubbish 200word stories that are meaningless snippets rehashing news that broke the previous day.
But people do pay for quality news, especially business news. What they certainly won’t pay for are publications that simply copy-and-paste yesterday’s stock exchange announcements.
Exclusive news you wouldn’t read elsewhere, now that’s different. This doesn’t come cheap, but if any moment illustrated the importance of investigative journalism, it was this week.
Former communications minister Dina Pule would never have been exposed as a charlatan and liar, but for the media.
She denied having a relationship with businessman Phosane Mngqibisa, whose company ended up pocketing R6-million given by Telkom, Vodacom and MTN to the ICT Indaba, after Pule leant on them to sponsor the event. This week, Parliament’s ethics committee branded Pule a liar, referring the case to the police.
The thing is, it never would have come out but for investigative journalism, an expensive resource for a newspaper.
Equally, some of the biggest stories in the country would never have been unearthed but for investigations by this newspaper, the Mail & Guardian and City Press: Oilgate, Nkandla, Bheki Cele’s dodgy lease deal.
Corruption distorts the fluid operation of an economy, and the rich realise they have the power to do something about it.
There is actually a fourth reason why people would invest in news — and that if you have an answer to the riddle of how to make money from online news.
Until now, there has been no compelling business model to do this — at least, not to deliver the profit that funds the sort of journalism that gets corrupt ministers like Pule fired.
Maybe Jeff Bezos will be the man to fix that. Amazon didn’t make a profit for years after pioneering a new way to buy goods — online. But he made it work. Let’s hope he has similar tricks up his sleeve for journalism. Democracy and accountability will be poorer if he can’t.