As this fine piece in the Washington Post makes abundantly clear, the New Media mavens who once appeared to be the future of journalism are running out of gas. Vice, Quartz, Buzzfeed, Mic and other Internet-based news organizations are not meeting their financial targets and there is a hint of consolidation in the air.
By no means am I gloating about it. My career was torn apart by the rise of the Internet, the dominance of Google and Facebook, and major shifts in advertising dollars. BusinessWeek, where I once worked, was sold to Bloomberg for pennies on the dollar. U.S. News & World Report, once a respected news magazine, no longer prints. Business 2.0, where I was a senior writer briefly, was taken over by Time and eventually folded. Everywhere we look we can see the carnage that has hit the established media.
So what is the economic model that can sustain an American media that does a quality job of analyzing and interpreting events at home and abroad? The corporate interests that swept in thinking media assets were highly profitable have been getting out. GE sold NBC, for example. The corporate buyers wanted 18 to 20 percent rates of return.
But now technology money is flowing into top media assets. Jeff Bezos bought the Washington Post with his personal money and the newspaper is rebuilding under Martin Baron (who will be appearing at the Overseas Press Club dinner on April 18). Patrick Soon-Shiong, a doctor turned entrepreneur, bought the Los Angeles Times after a nightmarish number of years under the ownership of Chicago real estate beasts. It’s doing well under Norman Pearlstine and Scott Kraft, both OPC members. (Kraft runs the club’s award competition.)
Elsewhere, the widow of Steve Jobs made a big investment in the Atlantic magazine group. And Salesforce billionaire Marc Benioff used his personal wealth to buy Time magazine. (Less positive examples: Forbes and Fortune, now controlled by Hong Kong Chinese and Thai interests, respectively)
This represents a return in the ownership model to the days when families such as the Binghams in Louisville, Ky., owned The Courier-Journal, where I interned as a college student. Other families owned the Wall Street Journal, Los Angeles Times and other major media entities. They wanted to break even or perhaps make some money but they saw media assets as their contribution to their communities and states and perhaps the country. They certainly did not insist on 18 to 20 percent rates of return.
So it seems we have come full circle. The old media, under new ownership, will be revived. They have websites and all the bells and whistles that younger readers want. But at their core, they have solid editorial teams and possess far more experience and sophistication that the vast majority of the New Media shops.
In the end, I am hopeful that editorial quality will prevail and start to create a healthier debate about the things that matter most to Americans. The shakeout has been painful and will continue to be painful for some. But at long last, there is a glimmer of hope for a stable ownership structure for the American media.
