Alden’s latest move may be the final act in Warren Buffett’s newspaper misadventure

Warren Buffett. Photo (cc) 2011 by Fortune Live Media.

The final act is about to be consummated in Warren Buffett’s disappointing dalliance with the newspaper business. Despite the legendary investor’s self-professed love for newspapers, he ran the newspapers he acquired starting in 2012 as a hopeless cause rather than investing in them as his fellow billionaires Jeff Bezos did with The Washington Post and John Henry did with The Boston Globe.

Buffett eventually sold his papers — including his hometown Omaha World-Herald — to Lee Enterprises. And on Monday we learned that the predatory hedge fund Alden Global Capital is now attempting to purchase Lee’s 90 daily newspapers, which are located in 26 states. The death watch has begun.

I wrote about Buffett’s track record as a newspaper owner in my book “The Return of the Moguls.” Here’s an excerpt.

***

When Buffett’s Berkshire Hathaway investment company purchased 63 newspapers from the Media General chain in 2012 for $142 million, the news was greeted with the hope that the legendary octogenarian might be just the person to show the way forward. Buffett bolstered his new holdings by extending loans to those papers totaling $445 million. It was a generous gesture with which Aaron Kushner and his investors, who also wanted the papers, could not compete. A year earlier Buffett had bought his hometown paper, the Omaha World-Herald, along with six other papers for $200 million. He already owned The Buffalo News. And in those pre-Bezos days, he held a substantial number of shares in The Washington Post Co. “Does Warren E. Buffett want to be a media mogul?” asked The New York Times.

Certainly Buffett had the right pedigree. Not only was he a brilliant financial thinker, but he had long loved newspapers and had been a close adviser to the Graham family at The Washington Post for many years. He even had a hand in winning a Pulitzer Prize: in 1973, when he was the owner of the Omaha Sun, he helped his reporters investigate a local charity by finding documents, providing financial analysis, and even assisting with the writing. Katharine Graham praised Buffett fulsomely in her autobiography, saying that he became a trusted confidant after he invested in the Washington Post Co. “By the spring of 1974,” she wrote, “Warren was sending me a constant flow of helpful memos with advice, and occasionally alerting me to problems of which I was unaware.”

Yet Buffett, astute financier that he is, expressed skepticism about prospects for the newspaper business after it entered its long decline. In 2009, for instance, he said he had no interest in purchasing papers, because their financial outlook was so grim. “For most newspapers in the United States, we would not buy them at any price,” he said. “They have the possibility of going to just unending losses.” And though he later reversed himself, his acquisition strategy gravitated toward papers of the type that still do reasonably well: those in medium-sized markets where the local paper is the principal source of regional and community news and where competition from the internet is less a factor than it is in large cities. Buffett’s papers carry little debt and are profitable. In the spring of 2016, though, he admitted that the picture was continuing to darken for the newspaper business and that he was no closer to finding a way out than anyone else.

“We haven’t cracked the code yet,” he told USA Today. “Circulation continues to decline at a significant pace, advertising at an even faster pace. The easy cutting has taken place. There’s no indication that anyone besides the national papers has found a way.” He added that even though all of his papers were making money (at that time he was up to 32 dailies and 47 weeklies), that might not be the case in future years. “If you have a problem in five years, you have a problem now,” he said. Buffett doubled down on those remarks in early 2017, telling CNBC that The New York Times, The Wall Street Journal, and possibly The Washington Post were the only newspapers he believed had an “assured future,” explaining, “They have developed an online presence that people will pay for.”

Less than two months later, the hammer came down at BH Media, the company Buffett had set up to manage his newspapers. BH Media announced the termination of 289 positions throughout the chain, including the elimination of 108 vacant jobs. The BH Media president and chief executive officer, Terry Kroeger, told the Omaha World-Herald that Buffett had been informed of the reductions but that “his opinion was not sought or offered,” in keeping with Buffett’s hands-off investment philosophy. Kroeger blamed the papers’ declining revenue on changes in retail advertising, and especially on the move to online shopping — an irony given how the most successful of the new breed of newspaper owners, Jeff Bezos, made his money. Buffett’s World-Herald did not suffer any cuts at that time. But then, in May, BH Media reduced the size of the Omaha paper and eliminated three jobs, according to a memo to the staff from the executive editor, Melissa Matczak.

For a self-confessed newspaper fan whose net worth was roughly the same as that of Bezos (more than $60 billion apiece in mid-2016), Buffett’s role in helping to figure out the future of journalism might be considered disappointingly modest. Perhaps it would be too much to expect someone in his mid-80s to dedicate himself to figuring out the future of the newspapers he had acquired. But he was ideally positioned to bring in the sorts of minds who might apply themselves to the task of saving smaller papers in much the same way that Bezos and Henry were attempting to reinvent their much larger properties. Surely Buffett understands as much as anyone that readers and advertisers will put up with an ever-diminishing paper for only so long before an irreversible downward spiral sets in.

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Facebook’s tortured relationship with journalism gets a few more tweaks

Facebook has long had a tortured relationship with journalism. When I was reporting for “The Return of the Moguls” in 2015 and ’16, news publishers were embracing Instant Articles, news stories that would load quickly but that would also live on Facebook’s platform rather than the publisher’s.

The Washington Post was so committed to the project that it published every single piece of content as an Instant Article. Shailesh Prakash, the Post’s chief technologist, would talk about the “Facebook barbell,” a strategy that aimed to convert users at the Facebook end of the barbell into paying subscribers at the Post end.

Instant Articles never really went away, but enthusiasm waned — especially when, in 2018, Facebook began downgrading news in its algorithm in favor of posts from family and friends.

Nor was that the first time Facebook pulled a bait-and-switch. Earlier it had something called the Social Reader, inviting news organizations to develop apps that would live within that space. Then, in 2012, it made changes that resulted in a collapse in traffic. Former Post digital editor David Beard told me that’s when he began turning his attention to newsletters, which the Post could control directly rather than having to depend on Mark Zuckerberg’s whims.

Now they’re doing it again. Mathew Ingram of the Columbia Journalism Review reports that Facebook is experimenting with its news feed to see what the effect would be of showing users less political news as well as the way it measures how users interact with the site. The change, needless to say, comes after years of controversy over Facebook’s role in promoting misinformation and disinformation about politics, the Jan. 6 insurrection and the COVID-19 pandemic.

I’m sure Zuckerberg would be very happy if Facebook could serve solely as a platform for people to share uplifting personal news and cat photos. It would make his life a lot easier. But I’m also sure that he would be unwilling to see Facebook’s revenues drop even a little in order to make that happen. Remember that story about Facebook tweaking its algorithm to favor reliable news just before the 2020 election — and then changing it back afterwards because they found that users spent less time on the platform? So he keeps trying this and that, hoping to alight up on the magic formula that will make him and his company less hated, and less likely to be hauled before congressional committees, without hurting his bottom line.

One of the latest efforts is his foray into local news. If Facebook can be a solution to the local news crisis, well, what’s not to like? Earlier this year Facebook and Substack announced initiatives to bring local news projects to their platforms for some very, very short money.

Earlier today, Sarah Scire of the Nieman Journalism Lab profiled some of the 25 local journalists who are setting up shop on Bulletin, Facebook’s new newsletter platform. They seem like an idealistic lot, with about half the newsletters being produced by journalists of color. But there are warning signs. Scire writes:

Facebook says it’s providing “licensing fees” to the local journalists as part of a “multi-year commitment” but spokesperson Erin Miller would not specify how much the company is paying the writers or for how long. The company has said it won’t take a cut of subscription revenue “for the length of these partnerships.” But, again, it’s not saying how long those partnerships will last.

How long will Facebook’s commitment to local news last before it goes the way of the Social Reader and Instant Articles? I don’t like playing the cynic, especially about a program that could help community journalists and the audiences they serve. But cynicism about Facebook is the only stance that seems realistic after years of bad behavior and broken promises.

The sale of Politico marks the end of a long duel between the Allbrittons and the Grahams

Katharine Graham believed that Joseph Allbritton hoped to take advantage of the 1975-’76 strike against The Washington Post. Photo by Reading/Simpson, noncommercial use permitted.

Robert Allbritton last week sold Politico to the German media company Axel Springer for $1 billion. Ben Smith, who was part of the launch back in 2007, wrote about the sale earlier this week in The New York Times. I wrote about the two-generation rivalry between the Allbrittons and the Graham family, who controlled The Washington Post until 2013, in “The Return of the Moguls.” Below is an excerpt.

Katharine Graham’s other crucial move was to endure a strike in 1975 in order to get the Post’s printing costs under control. So arcane were the work rules that when an advertiser submitted a finished ad (known in the post-hot-lead, pre-computer age as “camera-ready”), a union compositor still put together an equivalent ad, even though it would be discarded as soon as he was finished with it. In deciding to put a stop to such practices, Graham was fortunate in the viciousness of her opposition. At one demonstration, a leader of the union, Charlie Davis, carried a sign that read “Phil Shot the Wrong Graham,” a reference to Phil Graham’s suicide. On the night that the pressmen went on strike, some of them beat the night foreman and started a fire in an attempt to sabotage the machinery. Because of those actions they earned the enmity of the Newspaper Guild, which represented the reporters. With the paper’s journalists crossing the picket line, the Post was able to resume publishing after just one missed day, enabling them to break the strike. The benefits of being able to modernize production were immediate, as income grew from about $13 million a year to $24.5 million in 1976 and to $35.5 million in 1977.

Not all observers were sympathetic to the Grahams. Ben Bagdikian, a former Post national editor who spent much of his long, distinguished career after leaving the paper as an academic and a harsh critic of corporate journalism, wrote an article in the Washington Monthly attributing the strike to Katharine Graham’s earlier decision to go public. “The idiosyncratic publishers, whose integrity led them to ignore narrow economic arguments in favor of quality, and who as a result created America’s great newspapers, are disappearing,” Bagdikian wrote. “They were being replaced by profit-maximizing conglomerate owners. It is a forecast of trouble for independent journalism in the country’s most important news companies.” Graham recorded her response in a note to Ben Bradlee: “I am really embarrassed to think this ignorant biased fool was ever national editor. Surely the worst asps in this world are the ones one has clasped to the bosom.”

The Post’s rivalry with The Washington Star played a small role in the strike as well, a tidbit of interest mainly because of who owned the Star at that time: Joe Allbritton, a Texan who had acquired the paper from the Kauffmann family in 1974. Katharine Graham wrote that Allbritton declined to help the Post during the strike because, in her view, the only way the Star could stay in business was for the Post to fail. Allbritton sold the Star to Time Inc. in 1978, which closed it in 1981 even though Katharine Graham, Donald Graham and Warren Buffett had made overtures to set up a joint operating agreement under which both papers would be published.

The Allbritton family’s ambitions remained entangled with the Post for many decades to come. Years later, two Post journalists, John Harris and Jim VandeHei, were rebuffed when they proposed setting up a separate political website under the paper’s umbrella. They took their idea to Joe Allbritton’s son, Robert, who helped them launch Politico in 2007. With its hyperkinetic insider’s approach to covering politics, the site quickly established itself as a serious rival to the Post on one of its signature beats, although Politico was often criticized for emphasizing the superficial horse race aspects of politics.

Robert Allbritton also backed a site cheekily named TBD.com (for “to be determined”), edited by the former washingtonpost.com editor Jim Brady and the future Post media blogger Erik Wemple, which covered local news in the Washington area in conjunction with a television station the Allbrittons had owned since acquiring the Star. Fortunately for the Grahams, Allbritton lost patience with it within months of its 2010 launch, and in 2012 the site was shut down. Another Allbritton connection: About a year after Jeff Bezos bought the Post, he hired Frederick Ryan, a former Reagan administration official, to replace Katharine Weymouth as publisher. At the time that the move was made, Ryan was president and chief operating officer of Allbritton Communications and had served as Politico’s first chief executive.

The Post and Politico make for a fascinating contrast. Both companies are ensconced in brand-new headquarters on either side of the Potomac; Politico occupies part of an office tower in the Rosslyn section of Arlington, Virginia. The missions of the two organizations are very different. The Post is a general-interest newspaper with a substantial print presence. Politico is aimed at people in the professional political community, and though it publishes a small print product (daily when Congress is in session; weekly otherwise), it’s mainly digital. Yet if the ancient rivalry between the Post and The New York Times is mostly journalistic and symbolic, the Post’s rivalry with the Allbritton family has involved serious competition over whose news organization will prove to be more financially successful in the long run.

Correction: I have learned that the elder Albritton’s legal name was Joe, not Joseph. Unfortunately, it remains wrong in the book.

Marty Baron on Jeff Bezos, The Washington Post and the soul of American journalism

Photo (cc) 2013 by Esther Vargas

Previously published at GBH News.

Sunday was Marty Baron’s last day as executive editor of The Washington Post. The legendary editor, along with the Post’s deep-pockets owner, Jeff Bezos, is widely credited with reviving the paper and restoring its status as one of the pre-eminent American newspapers. Five years ago GBH News contributor Dan Kennedy interviewed Baron for his book “The Return Of The Moguls: How Jeff Bezos And John Henry Are Remaking Newspapers For The Twenty-First Century.” An excerpt from the book follows.

When I interviewed Marty Baron in March 2016, his office at The Washington Post’s new headquarters was smaller than I had expected. We sat at a conference table next to a human-sized cardboard cutout of an Oscar statuette, which he said was waiting for him after he returned from the Academy Awards gala in Hollywood.

The Oscar was for “Spotlight,” based on The Boston Globe’s Pulitzer-winning investigation into the pedophile-priest crisis within the Catholic Church — the story that defined Baron’s years as editor of the Globe. He also showed me a small chocolate Oscar he’d brought home. Soft-spoken and businesslike, with graying reddish hair and a closely trimmed beard, Baron talked for an hour about life at the Post under Jeff Bezos.

“I was completely shocked, obviously,” Baron said when I asked him about his reaction to the news that Bezos would buy the Post. “I told people when I came here that while the Times would probably like to sell the Globe, it was highly unlikely that Don Graham would be selling The Washington Post. So I was kind of stunned when I heard about it. But I thought that it could have some real advantages for us” — a reference to Bezos’s preference for growth over cutting and his deep understanding of technology and consumer behavior.

“I did not know if it would be a good thing for me personally,” Baron added, “because obviously when a new owner comes in he has the absolute right to pick who he wants to run the organization that he has acquired. He said positive things at the beginning, but my sense was that it would be a year of figuring out the place and deciding what he wanted to do.”

Even though Bezos bought a $23 million mansion in Washington, D.C., in late 2016, he spends most of his time on the West Coast. For the most part he manages his newspaper from afar, presiding over an hour-long conference call with the Post’s top executives every other week.

“It starts on time, ends on time; it’s very disciplined,” Baron said. “He gets all of the material in advance. We don’t use it to go through presentations. We use it to review any questions that he might have or to embark on any broader discussions. But typically all of the material is sent to him in advance in a narrative style, not PowerPoints. He doesn’t like PowerPoints, thankfully. He typically has some questions, and those questions become a springboard to discussion of whatever we need to talk about.” The Post’s leadership also travels to Seattle twice a year for a day of meetings. Baron said those meetings run from around noon to 6 p.m., followed by dinner.

I also asked Baron how the Post had been able to amass as large a digital audience as The New York Times — between 80 and 100 million monthly unique visitors at that time — despite a staff that was about half the size. His answer was two-fold. First, he said that the Post was not competing with the Times so much as it was competing for people’s attention, whether it be against The Huffington Post, BuzzFeed, Politico or Vox. Second, he said the Post is “doing things that are much more attuned to the digital environment” by “treating the web as a distinct medium.”

Among the examples Baron cited: hiring young digital-native journalists who write with a distinctive voice and who are unconcerned as to whether their stories appear in print or are only posted online; embracing multimedia tools such as video, the publication of original documents and annotation — debate transcripts, for instance, have been marked up with highlighted comments by Post journalists, adding context and occasional snark; and writing engaging headlines that are not constrained by the artificial confines of column width, as are print headlines.

“I mean, look, radio is different from newspapers, television is different from radio,” Baron said. “Here comes the web. We should be different, and mobile might be different, too.”

Now, I would argue that the Times’ approach to digital, although different from the Post’s, is every bit as engaging and innovative. But in discussing the Post’s rapidly growing digital audience, there’s an additional topic that can’t be avoided: its reliance on a presentation for some types of material that are aimed at maximizing shares and eyeballs.

Baron doesn’t like the term “clickbait,” and I agree with him that that’s not quite the right word. After all, “clickbait” suggests that the underlying story does not live up to the promise of the headline, and that’s rarely the case with Post journalism. But the Washington Post experience can vary quite a bit depending on how you access that journalism. The print paper mixes heavy and light fare, the serious and the entertaining, in a way that isn’t much different from what news consumers are used to. The website and the apps, though, often take a more viral approach.

That’s especially true with the national digital edition — the magazine-like app for mobile and tablet that debuted on Amazon’s Kindle Fire and later migrated to other platforms. For one thing, it omits local news so that its low cost won’t lure Washington-area readers into switching from their more expensive print or digital subscription. For another, the story mix and the presentation often have a viral feel to them. For instance, as I perused the national app on my iPhone on a Wednesday afternoon in April 2016, I saw stories like “O Cannabis! Canada Moves To Legalize Marijuana in 2017,” illustrated with a pot-festooned Canadian flag; “What Your First Name Says About Your Politics”; and “Diet Coke Is Getting A New Look.”

To be fair, these stories were well-reported and were interspersed amid more serious news. If I were riding on the subway and looking for something to read, I would have clicked on any of them. And there is nothing wrong with lightening things up as long as the core mission remains in place.

Longtime media critic and Post-watcher Jack Shafer, now with Politico, told me that he’s an admirer of Baron’s Post.

“It’s as good as it’s ever been,” he said. “In terms of accuracy, accountability, imagination, Marty Baron is a genius and an inspirational editor.” As for what Shafer forthrightly called “click-baitery,” he said it was no different from the days when newspaper editors would drop in a “Ripley’s Believe It Or Not” brief to fill a hole on a page. The idea, he said, is to make the Post a “habit.”

“You’re sitting there, you’re bored, or you’re angry at your editor, and you just want a media moment,” Shafer said. “It turns out that there’s a much larger market for that than we ever imagined.”

Baron put it this way: “Being viral doesn’t mean clickbait, and writing a headline and using a photo that would cause somebody to share something on a serious subject doesn’t make it clickbait. We do write headlines that we think will lead to sharing, and in many ways they get to the point a lot better. They actually explain the story better than traditional newspaper headlines. I mean newspaper headlines are terrible, right? They all have to be constrained within column sizes, so if you have a one-column head it’s all headline-ese. People don’t speak in headline-ese. The web and our apps allow us to write in a way that people speak.”

Post media blogger Erik Wemple, a veteran print journalist — among other career stops, he was the editor and media columnist at the alt-weekly Washington City Paper — told me that he was untroubled to be a newspaper columnist whose work rarely appeared in the newspaper. “All of the messaging and the emphasis seems to be on digital,” he said, adding that when he looked at the print paper, he often found it stale, as he saw stories that had appeared online a day or two earlier. “There’s a clear focus on digital work here,” he said. “That’s what the feedback loop bears, and that’s what drives conversation.”

***

One subject that often arises when asking about Jeff Bezos and The Washington Post is whether it can cover Amazon independently and impartially. Of course, it’s not unusual for a news organization to have an owner with outside interests that deserve coverage, with John Henry’s ownership of the Globe and the Red Sox being a prime example. But Amazon represents a particular challenge given its size, influence and cultural impact. Amazon, after all, is largely responsible for disrupting the book industry. Amazon Web Services does business with the CIA.

When Bezos met with Post staff members a month after he announced he would buy the paper, he told them that they should “feel free to cover Amazon anyway you want, feel free to cover Jeff Bezos any way you want.” By the spring of 2017, there were no reports that Bezos had tried to interfere with the Post’s news coverage.

Indeed, within days of the announcement that he would buy the paper, the Post published an in-depth examination of Bezos and Amazon that could fairly be described as warts and all — he was described as “ruthless” and a “bully” in his dealings with competitors and a boss who was known for launching “tirades” that “humiliated colleagues.”

As is his custom, Bezos refused to cooperate with the team of reporters who worked on that story. But national investigative editor Kimberly Kindy, who was among those journalists, told me there were no repercussions from Bezos after publication. “I don’t think that we have shied away from covering him. And he certainly has invited us to,” she said. Kindy’s Post career thrived under Bezos’s ownership. Among other things, she was deeply involved in a massive effort to document fatal shootings of civilians by police officers — a project that won the 2016 Pulitzer Prize for National Reporting.

Yet it was The New York Times, and not The Washington Post, that produced a lengthy, highly critical investigative story about Amazon’s workplace culture — a story that created a sensation when it was published in the summer of 2015. For anyone who had read Brad Stone’s 2013 book about Amazon, “The Everything Store,” there was little new information. Indeed, it struck me that the Times, unlike Stone, missed some crucial context in its implication that Amazon was uniquely awful rather than merely awful in the manner that’s typical of hard-charging technology companies. As the technology writer Mathew Ingram put it in criticizing the Times’ reporting, “To take just one example, Apple co-founder Steve Jobs’ treatment of his staff makes anything that Amazon has done (or likely ever will do) seem like a day at the beach.”

Regardless of the merits of the Times’ story, though, it may be too much to expect that the Post, of all media outlets, would take the lead on in-depth enterprise reporting about the dark side of Amazon. “To expect a newspaper to be a fifth column against itself and its owners is naive and probably without precedent,” Jack Shafer said.

Erik Wemple, on the other hand, said he hoped the Post could engage in such reporting if it was warranted. “It would be incredibly awkward to commission a big investigative story. And I hope we do endure that awkwardness,” Wemple said. “Bezos’s dream of a paper of record necessitates tough coverage of Amazon.” He added: “The difficulty is always one of self-censorship. That’s a serious concern of any news organization that has a mogul running it.”

Baron, for his part, said he had no intention of letting Bezos’s ownership of the Post interfere with the way his journalists covered Amazon. “Jeff said at his first town hall here, ‘You should cover me and cover Amazon the way you would cover any other company and any other chief executive, and I’m fine with that,’” Baron said. “On multiple occasions since then he has repeated that. He said the same thing to me personally. And I said, ‘Good, because that’s what I’m planning to do.’ And I have never heard from him about a single story about Amazon.”

***

In his early days at The Boston Globe, Baron kept an exceedingly low profile. As the news business shrank, Baron slowly began to emerge as a voice for embracing change while at the same time maintaining high journalistic standards. In 2012, when he was still at the Globe, he gave a speech in which he urged journalists to fight against the “fear” that had overcome them — fear of being accused of bias, of losing customers or offending advertisers: “Fear, in short, that our weakened financial condition will be made weaker because we did something strong and right, because we simply told the truth and told it straight.”

Baron’s public persona has only become more prominent since the release of the movie “Spotlight.” After the stunning victory of Donald Trump in the 2016 presidential campaign, marked by unprecedented attacks by Trump on the media, and especially on Jeff Bezos and the Post, Baron made use of his public platform to call for tough, independent coverage of the incoming president.

“If we fail to pursue the truth and to tell it unflinchingly — because we’re fearful that we’ll be unpopular, or because powerful interests (including the White House and the Congress) will assail us, or because we worry about financial repercussions to advertising or subscriptions — the public will not forgive us,” Baron said in accepting an award named for the late iconoclastic journalist Christopher Hitchens. “Nor, in my view, should they.”

Some months earlier, sitting in his office on a Wednesday afternoon, I had asked Baron about his emerging role as a voice of conscience in the news business. It was a moment that I found surprisingly poignant. Nearly 15 years earlier, I had interviewed him at the Globe for the first time. In those days he was virtually unknown outside the newspaper business. Now he was the most famous editor in the country by virtue of “Spotlight” as well as a respected advocate for excellence at a time when many newspapers were just a shadow of what they had once been.

“We could use more leadership in the industry,” he replied. A few moments later he added: “I think that people are searching for how to survive and succeed in the current environment while not abandoning our core principles. To the extent that I have helped shape the thinking in our profession about how one might do that, I feel pleased by that.”

Adapted from “The Return Of The Moguls: How Jeff Bezos And John Henry Are Remaking Newspapers For The Twenty-First Century,” by Dan Kennedy. Published in 2018 by ForeEdge, an imprint of University Press of New England: www.upne.com/1611685947.html.

The template for the Bezos-Baron revival of the Post was set early on

Marty Baron, center. Photo (cc) 2017 by the Knight Foundation.

I was struck by how little new information there was in this New York Times overview of Marty Baron’s years as executive editor of The Washington Post. As described by Times reporter Marc Tracy, the Post succeeded under Baron and owner Jeff Bezos by switching its focus from regional to national, and from print to digital.

There’s more to it than just that, of course, and Tracy’s piece is worthwhile if you’re not familiar with the subject. The ground that Tracy covers is laid out in my 2018 book, “The Return of the Moguls.” The Bezos-Baron template was set early on. In recent years, the Post has continued to grow (its digital subscriber base now exceeds 3 million, and more than 1,000 journalists work in the newsroom), but that’s simply a continuation of earlier trends.

Likewise, New York University journalism professor Jay Rosen has been touting a comment Baron made to CNN’s Brian Stelter about what he learned from Bezos: “One thing that Jeff emphasized at the beginning is that we really should be paying attention to our customer more than our competitors.” As Rosen says, “Sounds simple, like banal business advice. It’s not.”

In 2016 I asked Baron about the Post’s competition with the Times, and he answered the question in a manner similar to what he told Stelter. I compressed Baron’s answer in my book, but here’s a fuller quote:

Well, we don’t obsess about The New York Times in that sense. We don’t see that as our only competition. We see other people as our competition and, frankly, we see all calls on people’s time and in terms of getting news and information as being a competition for us, not to mention all the other competition for people’s time.

One aspect of the Bezos-Baron era that Tracy leaves out is the role of technology in the Post’s revival. Under chief technologist Shailesh Prakash (like Baron, a holdover from the Graham era), the Post developed state-of-the-art digital products that are fast and a pleasure to use — better than the Times’ very good products, quite frankly.

Overall, the Bezos-Baron partnership has been good for the Post, good for journalism and good for the public. I hope the next editor can build on Baron’s legacy.

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Talking about ‘Moguls’ and the future of news

Yikes! COVID hair! (Since cut.) I enjoyed having a chance to talk recently with Eileen MacDougall of “Book Stew” about “The Return of the Moguls” and the future of news.

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The Boston Globe reaches a long-sought goal: 200,000 digital subscribers

Photo (cc) 2006 by MyEyeSees.

Previously published at WGBHNews.org.

The Boston Globe now has more than 200,000 digital subscribers, editor Brian McGrory said at a Zoom gathering of the Society of Professional Journalists’ New England chapter earlier this week.

Much of the recent growth, he said, has been driven by interest in the Globe’s coverage of the COVID-19 pandemic. In a follow-up email, McGrory told me that the number of digital-only subscribers has risen from about 145,000 just before the pandemic to nearly 205,000 today.

“It took us 7 years to get our first 100,000 digital-only subscribers, and about 11 months to get to 200,000,” he said, adding: “The rise has been substantial, gratifying, and important in terms of supporting our journalism…. We’re the only metro paper that could support the current size of its newsroom through revenue from digital subscribers.”

That 200,000 mark has been a goal for a long time. When I interviewed McGrory in early 2016 for my book “The Return of the Moguls,” he told me, “If we got to 100,000 things would be feeling an awful lot better. And if we got to 200,000, I think we’d be well on our way to establishing a truly sustainable future.”

This week’s landmark comes with some caveats, though.

First, most of those new subscriptions were sold at a steep discount, generally in the range of $1 a month for the first six months. Given that the Globe’s profitability (pre-COVID, anyway) was built on an industry-high rate of $30 a month, the paper will presumably face a challenge in keeping those new subscribers.

Second, although we’ve been heading into the post-advertising era for quite a while, the pandemic has sent ad revenues across the newspaper business into a steep downward plunge. As the newspaper analyst Ken Doctor wrote for Nieman Lab in late March, “Advertising, which has been doing a slow disappearing act since 2008, has been cut in half in the space of two weeks. It’s unlikely to come back quickly — the parts that do come back at all.”

Nor has the Globe been immune from budget cuts. Co-op students, summer internships and freelance were cut right at the start of the shutdown. Don Seiffert recently reported in the Boston Business Journal that there have been an unspecified number of layoffs in advertising and other non-news operations, as well as reduced retirement contributions, in response to “significant” reductions in revenue.

Still, that’s minimal compared to what’s taking place across the newspaper business. The New York Times reported several weeks ago that some 36,000 news employees throughout the United States have been laid off, furloughed or had their pay cut. Many papers have cut back on the number of print days or eliminated print altogether. Some are closing. Poynter Online is keeping a list of cuts, and it is long and daunting.

The three leading national papers — The New York Times, The Washington Post and The Wall Street Journal — have been exceptions to the death-of-newspapers narrative for several years. But among the big regional papers, the Globe is doing better than all but a handful. In late 2018, publisher John Henry said the paper had achieved profitability. A year ago, Joshua Benton reported in Nieman Lab that the Globe had become the first U.S. regional paper to sign up more digital subscribers than weekday print subscribers.

But print still accounts for a lot of revenue in the newspaper business. Last week the Times reported that its shrinking print edition still accounted for more than half of its revenues. The Globe charges about $1,300 for seven-day print delivery. That’s a lot of money, but its print subscriber base continues to shrink. According to the Globe’s most recent filing with the Alliance for Audited Media, weekday print circulation is under 85,000 and Sunday print is about 147,000.

During the SPJ session, McGrory was asked why the Globe has kept COVID-19 coverage behind a paywall given that some other news organizations have made it free. McGrory responded that pandemic coverage is already free at two other Globe-owned sites: Stat News, which covers health and life sciences, and Boston.com. He added that he didn’t see cost as an obstacle in light of the discounts.

Via email, I asked McGrory about what steps the Globe was taking to keep all of its new subscribers once they were asked to pay $30 a month. “We’ve significantly ratcheted up the rate at which we’re graduating people from the low introductory rate into the full rate,” he replied. “We were doing really well with that retention before the coronavirus hit, and far better since.”

He added: “To keep the new subscribers who are part of this surge, we’re doing a lot of outreach — letters from notable staff members and the like. We’re also doing gifts, a possible loyalty program, virtual events for new subscribers…. There’s more. These readers are so vital to our future, and we want to let them know that. Of course, the most important thing is to feed them consistently strong and relentlessly interesting journalism. We will be in a huge news cycle for many, many months, between the virus and the massive economic disruption that it’s caused, inequality laid devastatingly bare, an epic presidential race, a reordering of so many things core to so many of our lives, condensed sports seasons, and on and on.”

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How Google destroyed the value of digital advertising

New York Times media columnist Ben Smith reports on efforts to compel Google and Facebook to turn over some of their advertising revenues to the news organizations whose content they repurpose without compensation.

The debate over what platform companies owe the news business goes back many years and has come to resemble a theological dispute in its passions and the certainty expressed by those on either side. Indeed, longtime digital-news pundit Jeff Jarvis immediately weighed in with a smoking hot Twitter thread responding to Smith.

I’m not going to resolve that debate here. Rather, I want to offer some context. First, something like 90% of all new spending on digital advertising goes to Google and Facebook. Second, Google’s auction system for brokering ads destroyed any hopes news publishers had of making actual money from online advertising. How bad is it? Here’s an except from my 2018 book, “The Return of the Moguls”:

Nicco Mele, the former senior vice president and deputy publisher of the Los Angeles Times, who’s now the director of the Shorenstein Center on Media, Politics and Public Policy at Harvard’s Kennedy School [he has since moved on], explained at a Shorenstein seminar why a digital advertising strategy based on clicks simply doesn’t work for news organizations that are built around original (which is to say expensive) journalism. “Google has fundamentally shaped the future of advertising by charging on a performance basis — cost per click,” he said. “And that has been a giant, unimaginable anchor weight dragging down all advertising pricing.”

For example, Mele said that a full-page weekday ad in the LA Times, which would reach 500,000 people, costs about $50,000. To reach the same 500,000 people on LATimes.com costs about $7,000. And if that ad appeared on LATimes.com via Google, it might bring in no more than $20. “Models built on scale make zero sense to me,” Mele said, “because I just don’t see any future there.” Yet it has led even our best newspapers to supplement their high-quality journalism with a pursuit of clicks for the sake of clicks.

From $50,000 to $7,000 to $20. This is why the advertising model for digital news is broken, and it’s why newspapers have gone all-in on paid subscriptions.

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Nicholas Lemann writes about ‘Moguls’ in The New York Review of Books

I’m excited to report that “The Return of the Moguls” is included in a round-up of books reviewed by Nicholas Lemann in the new issue of The New York Review of Books. Lemann’s essay, “Can Journalism Be Saved?,” is about the precarious state of the news business and efforts to find new business models. He writes:

What has happened in journalism in the twenty-first century is a version, perhaps an extreme one, of what has happened in many fields. A blind faith that market forces and new technologies would always produce a better society has resulted in more inequality, the heedless dismantling of existing arrangements that had real value, and a heightened gap in influence, prosperity, and happiness between the dominant cities and the provinces. The political implications of this are painfully obvious, in the United States and elsewhere.

A downbeat media roundup: Buffett disappoints, startups falter and publications die

Previously published at WGBHNews.org.

Has there been a more disappointing newspaper owner than Warren Buffett? When Buffett bought 63 papers from the Media General chain in 2012 for $142 million, it looked like the billionaire investor might play a significant role in reinventing local journalism. A year earlier Buffett had bought his hometown paper, the Omaha World-Herald, along with six other papers for $200 million. He already owned The Buffalo News.

And Buffett liked newspapers — so much so that he even had a hand in winning a Pulitzer Prize: In 1973, when he was the owner of the Omaha Sun, he helped his reporters investigate a local charity by finding documents, providing financial analysis, and assisting with the writing, according to a 2014 account in The Wall Street Journal. He was also a trusted adviser to the Graham family back when they controlled The Washington Post and he was a shareholder. “By the spring of 1974,” Katharine Graham wrote in her memoir, “Personal Story,” “Warren was sending me a constant flow of helpful memos with advice, and occasionally alerting me to problems of which I was unaware.”

Yet Buffett has been talking down the newspaper business for years — and last week he was at it again. “They’re going to disappear,” he told Yahoo Finance editor-in-chief Andy Serwer, citing the ongoing decline of advertising. He did allow that three national papers, The New York Times, The Washington Post, and The Wall Street Journal, might survive. But everyone else was “toast.”

Certainly they’re going to be toast with owners like Buffett. As I wrote in my book “The Return of the Moguls,” Buffett has allowed his managers to cut hundreds of jobs from his newspapers in recent years, even as his fellow multibillionaire Jeff Bezos has overseen growth and profits at the Post.

Perhaps it would be too much to expect someone in his 80s to dedicate himself to figuring out the future of the newspapers he had acquired. But Buffett was ideally positioned to bring in the sorts of minds who might apply themselves to the task of saving smaller papers. Surely Buffett understands as much as anyone that readers and advertisers will put up with an ever-diminishing paper for only so long before an irreversible downward spiral sets in.

Buffett is by no means the worst owner a newspaper could have — not with hedge funds and corporate chains slashing and burning their way through the mediascape. But anyone who hoped he would establish himself as an innovative force in recalibrating the economics of journalism has to be disappointed.

Two high-profile startups misfire

The meltdown of two high-profile digital startups raises questions about not just what went wrong, but whether there were any warning signs we should have paid more attention to.

The more disheartening of the two is The Correspondent, a Dutch website that recently concluded a successful fundraising campaign to launch what we all thought was going to be a U.S. edition. The project, funded through a membership model, is free of advertising and is based on the idea of journalists and readers engaging in an ongoing conversation. Among the early enthusiasts was Jay Rosen, a journalism professor at New York University. And me: I wrote about the project two years ago, made a donation to the site last fall, and urged others to do the same.

Recently, though, we learned that there wasn’t going to be a separate U.S. edition after all. Instead, there would be an English-language edition, based in Amsterdam, and the New York office would be closed now that the fundraising campaign had concluded. The founders took to Twitter to explain that we had misunderstood them. Had we somehow gotten it wrong?

No, according to Zainab Shah, a former BuzzFeed journalist who was The Correspondent’s first U.S. hire. In a devastating piece last Friday by Laura Hazard Owen at Nieman Lab, Shah said she took the job after being told she would head up what would in fact be a U.S. edition headquartered in New York, and that she recently quit after the founders made clear that it wasn’t going to happen.

“They’re really good at the PR thing, and it really feels like gaslighting,” Shah said. “They were like, ‘Well, we never promised a U.S. newsroom.’ I was like: Wait, did I just imagine all this?”

I should note that the founders continue to defend themselves and that Shah’s experience is just one data point. Still, this is bad news for those of us who hoped that The Correspondent represented a new way of doing journalism — “optimized for trust,” to use Rosen’s phrase.

Also running off the rails last week was The Markup, intended as a source of data-driven journalism about the largest technology companies. Months before its scheduled launch, co-founder and editor-in-chief Julia Angwin, formerly of The Wall Street Journal, was fired by chief executive Sue Gardner, whom Angwin had helped recruit, and replaced by another co-founder, Jeff Larson. Five of the seven editorial employees quit in support of Angwin, and Craig Newmark, the Craigslist billionaire who provided much of the funding, is said to be involved in getting the project back on track.

What exactly went wrong is too convoluted to get into here. For that, I recommend Mathew Ingram’s detailed overview at the Columbia Journalism Review. (Although I salute Angwin if it proves true that her sins included refusing to take a Myers-Briggs personality test.)

The larger issue with both The Correspondent and The Markup is whether there are any lessons in these two very different situations. I wish I could say there was — but at least in the case of The Correspondent we could see trouble brewing from some distance. Last fall, for instance, the site was involved in a nasty public dispute with Sarah Kendzior, a contributor to the Dutch-language site. The facts remain murky, though it was clear that something was amiss.

And then, as I’ve noted, The Correspondent’s founders not only reneged on their promise to launch a U.S. edition in the United States, but they claimed they had never said any such thing. That was gently disputed by none other than Rosen himself at his blog, Press Think, back in March.

“Through 2017 and much of 2018 we shared a default assumption that The Correspondent would be based in New York,” he wrote. “I call it a ‘default’ because we never sat down to decide it, and there was no real cost study or strategic analysis behind it. Rather, we had opened a campaign office in New York (with borrowed office space) and it seemed like that would evolve into The Correspondent’s newsroom.”

My only takeaway is that startups can be problematic. I’ll be watching The Correspondent closely and hoping its English-language edition proves to be worthwhile — although it will be a long time before I make another donation.

As for The Markup, I can only trust that Newmark, having already stepped in, will do the right thing. I assume that means bringing back Angwin in some top role, even if Gardner is not completely wrong about her alleged shortcomings as a manager.

The end of the road

New England lost two venerable publications in recent weeks.

Last week The Improper Bostonian, a free glossy magazine covering lifestyles, entertainment, and the arts, announced that its current issue would be its last after 28 years. “It was ultimately a family decision, that was really the bottom line,” owner and publisher Wendy Semonian Eppich told Folio, which covers the magazine business. “It was heavily based on finances, but it goes bigger than finances and that is critical and that is the truth.”

Several weeks earlier The Portland Phoenix, the last of the Phoenix newspapers, was shut down by its current owner, according to the Bangor Daily News. The Phoenix traces its roots to the Boston After Dark, founded by the late Stephen Mindich in 1966. At one time the papers included editions in Boston, Providence, Worcester, and Portland. I was on staff at The Boston Phoenix for many years, and I wrote the cover story for the Portland paper’s debut in 1999 — a profile of Maine’s then-senators, Olympia Snowe and Susan Collins, both moderate Republican women.

The fortunes of free publications with free websites have diminished to the vanishing point as advertising revenues continue to crater. We’re lucky that we still have DigBoston, a for-profit alternative weekly allied with the Boston Institute for Nonprofit Journalism.

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