Swimming in the Press Pool: Jeff Bezos and The Washington Post: This Might Hurt a Bit

Bezos could save the news business, but journalists might not recognize their industry when he’s done.

The carcasses litter the ground. The decline of the American newspaper is old news now, of course, but it’s not hard to find continuing evidence of the carnage. Papers all over the country are slashing expenses, cutting home delivery to just a few days per week and laying off hundreds of reporters and wondering when the hell their revenues will finally hit bottom.

And yet hope springs eternal from the keyboards of media trend watchers. Every time a new technology or trend emerges, a thousand hopefully-questioning headlines bloom. Back when tablets were shiny and new, we had “Can the Apple tablet computer save journalism?” and “Tablet Journalism: Can Rupert Murdoch’s iPad Adventure Save the News Business?” (Spoiler alert: No.) Then, “Can metered content save journalism?”, “Can the New York Times paywall save journalism?”, and “Build That Pay Wall High.”

Photo by Flickr user Steve JurvetsonThis week, Jeff Bezos — Amazon’s founder, who’s reportedly worth $28 billion — scrounged around in his couch cushions and came up with $250 million to buy The Washington Post. So now there’s a new crop of headlines: “Can Jeff Bezos save journalism?”, “The Insiders: Can rich patrons save journalism?”, “Jeff Bezos Just Might Save Local Journalism”, “If anyone can find a viable plan for newspapers, Jeff Bezos can”, and on and on.

In fact there’s a reasonable case that Bezos’s ownership is indeed a boon to The Post, and that he and folks like him could end up doing great things to help journalism.

But note what those headlines aren’t suggesting. Nobody is predicting “Jeff Bezos will save 7-day-a-week delivery of the printed Washington Post” or “Jeff Bezos will prevent Post layoffs.”

This may be harsh news to me and to my journalist colleagues, but if Bezos in fact manages to save journalism, there’s a good chance he’ll do it by destroying the newspaper industry as we know it.

Versions of the pro-Bezos argument abound, but in a nutshell this is the most convincing version:

Newspapers’ profits are continuing to decline, as print circulation and print advertising revenues dry up; nothing anybody has invented (yet) on the digital media side has come close to making up that difference. But despite the constant gloomy forecasts, many or even most newspapers are still turning a profit (at least for now).

The days of 30-percent newspaper profit margins are history, and no sane Wall Street investor would invest in a company that sees its profits shrinking like newspapers’ are. But a wealthy private investor might be perfectly satisfied to helm a business that continues to eke out a modest profit, with the added bonus of the cachet that comes from owning a capital-“N” Newspaper. Bezos makes a particularly fitting hero for this story, because under his stewardship Amazon has consistently returned either very low or nonexistent profits. So, hey, a minimally-profitable newspaper seems like a perfect fit, with Bezos’s unfathomably deep pockets subsidizing great journalism right on into the sunset.

Much of this is true; private (or even nonprofit) ownership is one of the only rational answers to the current economics of the newspaper industry. But all this misses a key point about the way Bezos seems to see business. That part comes out in a second pro-Bezos argument that has potentially deeper consequences than its proponents seem to realize: That Bezos will save The Post by reshaping it in Amazon’s image.

To anyone who’s experienced the ease and convenience of ordering stuff through Amazon (that would include me, and pretty much everyone reading this, I’d wager), this idea has immediate appeal. Unlike most newspapers, Amazon has already figured out how to successfully market and sell digital content, and there are intuitive overlaps between the shipping and physical distribution aspects of Amazon and papers like The Post.

But the idea of Amazonifying The Post should be than a little terrifying to anyone who’s currently making a living as a journalist, particularly those now under Bezos’s employ.

First, Amazon has proved extremely effective at finding the rock bottom value of its employees. My friend and colleague Spencer Soper rounded up accounts from Amazon warehouse workers back in 2011; he heard stories of employees forced to work in stifling heat at a brutal pace, under constant threat of being fired. The warehouse’s workforce was overwhelmingly made up of temporary employees, who told Soper that most of them were pushed harder and harder until they were fired, quit, or got hurt — and consequently very few ever landed permanent, full-time positions at Amazon.

Soper has continued to report on conditions at that warehouse, and to its credit Amazon has made some improvements. But the key business lesson here is that Amazon knew just how far it could push its labor market: It knew that, the way things were in 2011, able-bodied workers would line up around the block and endure almost any work conditions, and they’d take whatever Amazon was willing to give them. Amazon could replace them as quickly as it could burn them out.

This is particularly bad news for writers and reporters, considering there are legions of people willing to do this work for free. To pick just one famous example, some 9,000 bloggers signed on to work for the Huffington Post for absolutely zero dollars. Frankly, if Bezos could line up thousands of volunteers to do the work of his for-profit company simply by snapping his fingers, he’d be a fool not to.

With the notable exception of those Post journalists who have built themselves into Internet celebrities or cable TV personalities, this could be bad news for all those excellent-but-sort-of-anonymous Post writers and reporters who’d like to actually get paid for their work.

The second thing, which should scare pretty much everybody else in newspaper journalism, is that when Bezos gets into a new kind of business, his goal is not to take over the industry but to destroy it.

Amazon started with books. Anybody remember Borders? Then, after Amazon got into consumer electronics, so went Circuit City. By now Amazon has put itself in direct competition with everyone from Apple to Wal-Mart to your grocery store, apparently with the long-term goal of supplanting all of them.

Thanks to Wall Street’s adulation, and its faith that someday in the future Bezos will flip a switch and suddenly make Amazon hugely profitable, his company has gobs of cash to keep on expanding into every part of consumers’ lives — a fact that ought to scare the bejeezus out of anyone in any industry Bezos sets his eye on.

So, yes: Jeff Bezos may indeed save The Washington Post, and in so doing he may create a business model that’s copied to revitalize struggling newspaper companies across the country. I don’t doubt that he’s sincere when he says “the paper’s duty will remain to its readers”; I believe he’d like to support The Post’s tradition of investigative journalism, which is often difficult and expensive to produce but has incalculable benefits to society.

But in his note to The Post’s staff, he also mentions “new kinds of competition, some of which bear little or no news-gathering costs.” Astute observer, that Bezos.

Maybe this time the messianic headlines are right — maybe, unlike tablets and paywalls before him, Bezos will forge a path that truly is the best hope to save journalism as an industry. I hope he can.

But nobody should have any delusions about Bezos saving newspapers as we know them now. If he does succeed, it will be because Bezos turns out to be clear-eyed enough to realize that destroying the current newspaper industry might be one of the only ways left to save journalism.

Article © 2013 by Michael Duck