The takeover of the Washington Post by Amazon founder Jeff Bezos is a definite shake up of the US media world. But the purchase of a paper by a billionaire is not exactly a big surprise and has been done before.
Just a few hours before the news broke that Jeff Bezos was buying the Washington Post, there was another billionaire making his first appearance at his newly acquired paper: John Henry, owner of the Boston Red Sox baseball team and of the British soccer side FC Liverpool, showed up on Monday at the editorial offices of the Boston Globe. Only three days before, he had finalized the takeover of the storied broadsheet from the New York Times Company for a mere 70 million dollars. Some 20 years earlier, the New York Times paid a whopping 1.1 billion for the paper.
This drop in value of a publication that had won 21 Pulitzer Prizes is more telling about the decline of large US dailies than any statistics about reach, readership and advertising revenue. Aside from very few exceptions, US quality papers have failed to find a way to keep afloat.
Pulling the plug
The Washington Post is - together with the NY Times and the Wall Street Journal - one of the leading papers in the US. It's no secret that the Post was in financial difficulties. For a long time, the majority holders, the Graham family, had been trying to stem the downward trend. Investing in the online edition, cutting staff, changing the focus - nothing seemed to work to bring the paper back on track.
Just last week, the Washington Post Company had to once again announce a loss - 14 million dollars (11 million euros) - for their print business for the second quarter of 2013. Now, the Graham family sold the paper for 250 million dollars to Jeff Bezos.
For Robert Picard, professor at the Reuters Institute for the Study of Journalism at Oxford University, England, it's not a bad deal. "At least in the short term it is good for journalism in that we now have owners that come into the industry with resources to operate a newspaper and who bring a different perspective on the business side," he explained.
A downward trend
By now, Ricard said, there is an understanding that newspapers no longer work as a business model for genereating high revenue, like they did in the 1990s. Even the country's most important paper, the New York Times, has had a massive investor for years - Mexican Carlos Slim, another billionaire, and one of the world's richest men.
"All of these large papers in the US, particularly in the metropolitan areas, just don't make economic sense to be bought that way," he points out. Therefore, it made sense that Bezos bought the paper as an individual and not as part of his company, Amazon. What the deal will actually mean for the journalism that made the paper famous remains to be seen, he cautions.
Contrary to other billionaires with forays into the media - most notably, the liberal Warren Buffett, or conservative Rupert Murdoch - Bezos so far has never really been politically outspoken. Buffet's holding company, Berkshire Hathaway, is the second largest shareholder in the Washington Post company, after the Graham family.
But it seems obvious that Amazon founder Bezos will push the digital edition of the paper. In an interview last year with a German paper, he was quoted as saying that in 20 years time, printed papers would no longer exist. "I personally think that we'll still have printed papers in 20 years," says media expert Christian Fuchs of the University of Westminster, but the trend is going toward offering the content online, in print and as ebooks.
His colleague Picard believes that Bezos' experience with Amazon provides him with a lot of know-how in both digital and analogue distribution and "he will be looking very significantly at what they can do with digital distribution."
Wakeup call for Germany
For publishers and journalists in Europe, the deal is an alarming signal. Over the past 40 years, European print media has always lagged about 10 years behind US developments, Professor Picard says. "I think what we are seeing is an emerging pattern in a changing industry, in advertising and in readership, that is starting to hit Germany quite heavily."
Until very recently, German print media had been somewhat protected but those times are over, according to Picard. "I expect some big changes in the industry in the coming years, especially among German publishers owned by large companies or publicly traded corporations."