By Oon Yeoh
There isn’t any industry that’s come into contact with the Internet that has not been disrupted by it. The music industry, the movie industry, the book industry – they’ve all been impacted, and in no small way.
All are coping – with various degrees of success – by offering digital versions of their offerings. And so it is with the newspaper industry although it seems to be the one that’s had the least success of all.
Newspapers all over the United States are downsizing and some are even closing down. Very few have managed to make their online editions commercially viable. The industry needed a saviour, much like how Apple’s Steve Jobs saved the music industry by making iTunes a viable alternative to illegal file sharing sites.
This is probably why there was so much industry buzz last week when news first emerged that Amazon.com founder Jeff Bezos will be buying The Washington Post for US$250 million.
Within hours of the initial news break, commentary pieces started appearing online. The most speculated topic was his motivation for buying the paper. Many understandably assume that Bezos would seek synergies between news and online retail, perhaps by delivering highly personalized news packages through Amazon’s Kindle device.
Somehow I doubt that’s his plan because the Post was not acquired by Amazon.com but by Bezos in his personal capacity. If he had really wanted to incorporate news into Amazon.com’s business, he would have made the Post an Amazon.com subsidiary.
Others have speculated that it’s more like a hobby for him – a side project for Bezos to tinker with and see if he could make it work. To me, that’s a more likely scenario. Although US$250 million is not exactly chump change, it represents 1% of the Amazon.com founder’s net worth. It’s something he can experiment with.
To say that it’s his hobby doesn’t mean that Bezos is not serious about turning the company around. Pixar was a private investment by Steve Jobs (he had bought it from Lucasfilm) that had little to do with Apple. All in, it’s been estimated that Jobs had put in about US$50 million of his own money into the then-ailing Pixar. Under his ownership, it grew to become a major player in the animation industry, which was eventually sold off to Disney for a cool US$7.4 billion.
Could Bezos, who many consider to be the “next Steve Jobs”, be looking to the do same kind of turnaround with the Post? That is, to take over a money-losing company and transform it into a trailblazing industry leader?
Like Jobs, who revolutionized the personal computer industry, Bezos revolutionized the online retailing industry. Both were revolutionaries in their own rights. Jobs went on to disrupt other sectors, notably the music and mobile industries. Bezos has yet to prove that he can apply his magic touch to something other than retail. Perhaps the news industry is it.
So far, the industry has failed to fix itself. But that’s not surprising. Quite often, you need an outsider’s eye to spot rules that need to be broken. Industry insiders are far too enmeshed in legacy thinking to break industry norms – norms that no longer benefit the industry but rather, hold it back.
Economist Burton Klein has looked into this matter and he could not find a single instance of a major advance ever successfully coming from within the industry most affected by it. None.
So what can Bezos do that the industry itself cannot? For one thing, as Slate.com’s Farhad Manjoo has pointed out, he can look beyond the two models that the industry seems fixated on, which is free content (with advertising) and paid content (with no advertising). Neither one has worked, yet no one has tried any other approach. It’s likely that Bezos will.
Over in this neck of the woods, the newspaper industry is not suffering quite as badly. Advertising revenues are down compared to yesteryear but we’re not (yet) seen newspapers downsize or worse still, shut down. But how long can print media go on like this if the global trend indicates that it’s a sunset industry?
Perhaps media owners in Malaysia can learn from the mistakes of their Western counterparts and start looking for outside talent to spearhead transformation before the industry starts to collapse. Expecting change to come from within is wishful thinking. You need people outside the industry to come up with out-of-the-box ideas.