Billionaire media buy-outs may lead to two-tier news ecosystem

In an op-ed published by French newspaper Le Monde, Chairman of MDIF’s Board of Directors Bernard Poulet argues that recent changes in media ownership may speed up the divide between the quality of online information for those who can pay and those who can’t. There are, however, positive signs that both traditional publishers and pure-play subscription blogs may be starting to develop sufficient online revenues to sustain their journalism.

A two-tier news ecosystem

For the quality press, the moment of truth came in the middle of summer. What yesterday was “unthinkable” for most Americans happened on 5 August: the announcement of the sale of the Washington Post by the Graham family, the owners for more than 80 years, to the founder and CEO of Amazon, billionaire Jeff Bezos. The event marks the symbolic end of a trend that began a decade ago. Not only were the Grahams of a Democratic persuasion while Bezos is a confirmed (ultraliberal) libertarian, but mostly the changing of the guard underlines the meltdown of the economic and professional model of newspapers, weeklies and magazines.

The boss of Amazon, the site that made Jeff Bezos a fortune by becoming, at the cost of a tough social policy, the leading internet supermarket, and which is “complicit” with Google,  Apple, Facebook and several others in ruining the traditional press , is therefore taking control of one of the jewels of the old quality press. As an American analyst wrote, it’s the iceberg that sank the Titanic.

Yet this is the same Jeff Bezos who declared a year earlier: “There’s one thing I’m sure of, there will be no more newspapers printed on paper in 20 years’ time. Except perhaps as a luxury product in a few grand hotels who want to offer it as an extravagance to their customers.”  (The original quote was printed in German in the newspaper Berliner Zeitung.) Has he changed his mind or does he have another objective?

With the Washington Post, Jeff Bezos is saving one of the most prestigious investigative and impartial newspapers in the world. A newspaper that revealed, with the New York Times, the Pentagon Papers whose publication in 1971 contributed to the end of the war in Vietnam. It was also, of course, the Watergate newspaper that led to the resignation President Richard Nixon in 1974. Even if it has lost its lustre – in 20 years it has seen half of its readers disappear and its newsroom has shrunk from 1,000 journalists to 640 – it remains a point of reference for the press worldwide and has again just shown its qualities in publishing some of the documents revealed by Edward Snowden.

Redemption by billionaires seems to have become the new standard for newspaper survival. At least for those who haven’t already shut up shop. In addition to the Washington Post, this is the case for the Boston Globe, sold a few days earlier to John Henry, billionaire owner of the local baseball team, and Newsweek, passed to the control of an internet business, IBT Media. All this while the Koch brothers, funders of the ultraconservative Tea Party movement, have had their eyes on the Los Angeles Times and the Chicago Tribune for a long time, that the “guru” Warren Buffett has taken a handful of regional newspapers and, it has been said, that Google as well as outgoing Mayor of New York, billionaire Michael Bloomberg, have designs on the New York Times (which is not for sale, for now).

Of course, these well-advised businessmen are not hoping to increase their wealth by buying these more or less lame ducks. Moreover, Jeff Bezos acquired the Washington Post out of his personal fortune ($250 million, just 1% of his assets ) so there is no negative impact on Amazon’s share price. Like his colleagues, he bought a means of influence. At a time when Amazon is threatened by inquiries into its monopolistic position, its abuse of privacy and how it avoids tax, it is useful to have this strategic position in the capital of the United States. Even if Jeff Bezos does not dictate a single line to “his” journalists, politicians in Washington, some of whose campaigns he has already financed, will know what they have to do. Amazon will have a lot of friends in the federal capital.

Moreover , one can also legitimately wonder whether Jeff Bezos’ Washington Post would have revealed the Prism case as it prepares to sell part of its cloud to the CIA. Or if it would again, as it did a few days ago, for the first time, make public the budget of the 16 US intelligence agencies, including the CIA.

Thus, the future of the quality press is in danger of becoming complicated if it can’t find its own economic balance and if it needs to come under the control of billionaires who have their own economic or political agenda.

Jeff Bezos has surely not forgotten that in 2004, two Stanford students produced a video (Epic 2014, still on YouTube ) that told the evolution of the press up to 2014. The movie ended with the seizure of overall power on the internet by “Googlezon” (a giant product of the merger of Google
with Amazon). It also predicted that the New York Times would cease to be printed and only exist online. As for the old “Gray Lady”, all that remained was a confidential newsletter to a few ageing members of the international elite. Fiction that today threatens to become reality.

Some will argue that former press barons , those who made a fortune in the newspaper business, such as Randolph Hearst or Rupert Murdoch, were not all virtuous defenders of freedom. And, in the end, it is better to be saved by a billionaire capable of making the necessary investments, than to close down. But that’s another story.

However, there is still the possibility of writing another scenario. Thus, the New York Times is fighting, with some success, to survive and preserve its independence. It was one of the first to abandon the illusion that everything is free. And you’ve got to pay more and more for its news, which is always excellent. It has done with this with success, as in recent months it has managed to restore the balance of its accounts.

It has also understood that the notion of a newspaper had become too narrow. The New York Times is now a production centre of quality information which is distributed by any means possible (paper, web, tablets, smartphones, etc.). With its reputation, it strives to become a “global brand”, with Brazilian, Chinese or South African online editions. In short, it is not giving up. And, like others, uses its prestige and credibility to develop new activities – seminars, consulting, etc. – to build new sources of revenue. Will it be able to generate enough profits to compensate for the irreversible decrease in circulation and advertising revenue? It remains to be seen, but it’s worth trying.

It also seems that quality information will become more and more expensive and will therefore be aimed at a limited audience – an elite – willing to pay for it, while free information will merely offer a basic level of information for most people. That demonstrates, alongside the arrival of billionaires, another aspect of the democratic problem posed by this upheaval in information.

Although no society can live without information, it is not certain that all citizens agree. However, if all organized societies need information, it’s only in democratic societies that widespread access to pluralist and quality information is assured. In our civilization, it started with the letters of the Fugger banking family, texts prepared by their correspondents to inform the bankers of the economic, political and social situation, culminating in the mainstream press of the 19th Century, which became affordable thanks to advertising money. It is this information which allows citizens to make an informed judgment, especially when they have to vote.

Politicians, business leaders, bankers and investors, trade unionists, and even those with hobbies will always need to be informed. And well-informed. But the decline of the mainstream press and the proliferation of confidential letters sold at a high price to readers with the means and desire to pay seem to indicate a return to the past.

In a world that corresponds to the first prophecy of Jeff Bezos, where quality papers will be reserved for a rich and ageing elite. A world where a great mass of citizens only have a choice between , on the one hand, impartial subsidised information (by bankers of politicians) and on the other (or at the same time) free low-quality information. In short, rich information for the rich and poor information for the poor. Whatever you think, this was not the case in recent decades when big quality newspapers were the route to riches. Such a situation denies the possibility of real public opinion and, perhaps, real democracy. Between information in the service of the powerful and unequal information, it would be better to find another way.


Journalists, only quality will save you

ANDREW SULLIVAN is one of the most famous bloggers in the United States. Early this year, he decided to work for himself. Leaving The Daily Beast, the site that hosted him, this talented and provocative columnist chose to finance his own blog thanks only to the subscriptions of its readers. A bold step, but highly significant in the evolution of the new economy that is starting to emerge for quality information.

Within months, he raised $715,000 in subscriptions (with a target of $900,000 by the end of the year) to pay himself and a small staff. Whether or not he succeeds, his experience already provides valuable lessons. It demonstrates that the right information has value and that there are people ready to pay for it. And that a pure player (an independent media organisation that exists only online) can earn revenue, even without advertising. In France, Mediapart has also shown it is possible. But be careful! For readers to be willing to pay for information, they must be offered something that has genuine added value. Whether it comes from the expertise and relevance of the information (as in the case of financial information, which is already well paid for), the quality of the design (as in the case of “Mooks”, the beautiful magazines sold in bookstores) or the talent of the journalists (writing, style, etc.).

Good news for readers

It is no longer a question of whether this is the end of newspapers or not. Mass has already been said. The traditional newspaper form is expected to largely disappear. Newspapers will of course still be around for a long time to come, as in the music industry there are CDs and even LPs (the fashion for “mooks” proves  it).

The galaxy of information has exploded. The internet and the proliferation of news channels continue to make traditional ​​journalism largely obsolete. There’s no need to try to be among the first to announce something that the whole world will know one minute later.

Quality journalism will have to change, but not in the sense imagined by Net Utopians. The dream that “We are all journalists” is no longer valid. Instead, journalism must be much better than it was. More expert and more skilled.

This is good news for readers that can and/or want to pay. This is bad news for a large group of average journalists who used to be able to settle for mediocrity, sheltered by advertising revenue.

Alongside the divide between rich information for the rich and poor information for the poor, we can already see another brutal divide emerging, between journalists who add high value, an elite minority, and the large mass of information workers riveted in front of their screens like a poorly paid chain gang.

I would not advise my son to become a journalist, unless he could prove he has real talent.

This article first appeared in Le Monde. Read the original French here. Photo by Esther Vargas.

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