The classic Orson Welles movie “Citizen Kane” was released in 1941, back when radio was the only medium posing a threat to newspapers’ hegemony over the news business, but it still holds considerable pertinence to the media scene today — particularly as it applies to rich guys buying newspapers.
Rich guys such as Warren Buffett, who has been on a buying spree of late, or Boston Red Sox owner John Henry, the acquirer of The Boston Globe, or our region’s own man of financial heft, Jeff Bezos, who is to be the new owner of The Washington Post.
We’d recently commented in this space that the favorite local sport of conjecture is guessing what Boeing’s long-term intentions are with regard to assembling airplanes in the Northwest. That has been replaced, for the moment, with conjecture as to what Bezos’ intentions are with the latest addition to his portfolio.
His motivation may be nothing more than, to borrow a quote from Welles’ character Charles Foster Kane, “I think it would be fun to run a newspaper.”
Wealthy people have bought things over the years not out of any strategic business purpose but because they were personally intrigued by them. In that regard Bezos has followed the Paul Allen model of purchases and acquisitions made out of personal fascination (and because he could). Allen’s interests range from music and science fiction (hence a museum combining the two in Seattle) to an extensive collection of historic aircraft. Bezos has been interested in space; he founded one company that is developing platforms for space flight, which could be considered a business venture, but he also financed the recovery from the bottom of the Atlantic an engine used to launch the Apollo 11 mission to the moon, which offers no prospect of a financial return but is still very cool.
The dissuading argument to the idea that Bezos bought the Post because it might be fun is that no one has had fun in the newspaper business for years, maybe decades.
There used to be a rule of thumb that newspapers sold for roughly $1 million for every thousand copies of circulation. The most recent report for the Post’s circulation was 473,000. That number has declined considerably, but even in its emaciated state that number would suggest a price of $473 million. Bezos is getting the Post for $250 million.
Not that losing money is a new phenomenon in the newspaper business. Back to “Citizen Kane”: “You’re right, I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars next year. You know, Mr. Thatcher, at the rate of a million dollars a year, I’ll have to close this place in ... 60 years.”
In 1941, $60 million was real money; Bezos has considerably more than that, and perhaps he’s not expecting much if any return on his money, but even the wealthy can tire of such expensive hobbies.
Unless, of course, he has some plan or talent for reviving this industry and restoring it to profitability, and that’s the most intriguing aspect of Bezos becoming a newspaper magnate.
Bezos is usually lumped in with other tech titans associated with companies such as Microsoft, Apple and Google, and that’s a bit misleading. Where Bezos really made his mark was the application of technology and new approaches to an old business — retailing. That was no small achievement, given the number of Web-based retailing ventures that burned capital even more efficiently, through the dot-com bust, than newspapers have.
Even if he has no plan, Bezos could hardly do worse than the industry has done to itself to date, through its headlong chase for a digital model, including giving away content, with no concept of how it would work financially. Bizarre strategic moves (or non-moves) abounded. The Washington Post for years owned The Herald in Everett, for no apparent coherent reason; it never sought to build a network of other smaller papers. It eventually sold the paper to Sound Publishing.
Bezos comes in with the financial resources, but more important than that he comes in with a demonstrated willingness to ignore what anyone — the media, politicians, Wall Street, “experts” — says about him, and to experiment. To Kane for a third time (and by the way, the quotes from that movie were double-checked on IMDb, a website of movie information that happens to be owned by ... Amazon): “I don’t know how to run a newspaper, Mr. Thatcher; I just try everything I can think of.”
Maybe Bezos will be a raging success, or make as much of a hash of the newspaper business as others have. Maybe he’ll build a media network, or let the Post languish as a one-off deal.
But given that willingness to try everything he can think of, and what has happened so far when he has, aren’t you just a little bit intrigued to see how this plays out?