Billionaires dominate so much of our attention. They are treated as people to look up to, to emulate and to learn from. Articles showcasing Elon Musk’s favourite books or Bill Gates’ daily routine are always popular and click-worthy. They play a dominant role in our public conversations. Do they pay enough tax? If we used their business techniques in different industries could they lead to similar ground-breaking results? Celebrity CEOs are the new A-listers.
We are enthralled by their stories. But recently they are playing a much larger role in creating, publishing and spreading those stories. After Jeff Bezos bought The Washington Post many were sceptical of his motives. After taking a hands-off role in the editorial direction of that paper, though, many are using his example as a way to save the newspaper business. Headlines from USA Today, Forbes, Business Insider and many others look to billionaires to save the newspaper industry. So, is attracting the investment of billionaires as a form of philanthropy the only way that papers can survive in the 21st century? How much of the print journalism industry is already controlled by billionaires?
And ultimately, is it good that people with such power in business, finance and politics should hold even more power over the news we get?
In the UK there are several major newspapers with huge circulations that are owned by billionaires. These papers make up the majority of papers, both tabloids and broadsheets, bought in the United Kingdom. The Sun and the Daily Mail are the most popular weekday publications, making up over a third of all circulation figures. The Sun, and its sister weekend edition the Sun on Sunday, is owned by the Australian publisher Rupert Murdoch, the billionaire behind News Corp. He also controls the Wall Street Journal and the New York Post in the US. Lord Rothermere owns the Daily Mail and Metro, the London based freesheet paper read by nearly one and a half million commuters in the British capital.
The power to reach such an audience is an attractive one for these proprietors, and both have used the front pages of their papers to try and influence elections and referendums in the past. The Sun even boasted of its ability to swing the 1992 general election in the UK to the Tories with the now infamous headline ‘It’s the Sun wot won it’. Abandoning the Conservatives in the following election, in 1997, and backing New Labour’s Tony Blair, the Sun and Murdoch again demonstrated their ability to swing an election to their favoured candidate.
Sensational headlines and self-promoting claims are part and parcel of the tabloids’ approach to journalism. They are not alone in promoting political candidates, however, and the broadsheets, more reputable papers, follow suit. The political bias that some papers have, such as the Telegraph which is often jokingly referred to as the Torygraph, also goes hand-in-hand with them being owned by other powerful individuals.
Rupert Murdoch, not content with The Sun, also owns The Times, a paper with an enviable pedigree. Alexander Lebedev, an ex-KGB officer and described as one of the Russian oligarchs that rose to great wealth in the aftermath of the collapse of the USSR, and his son Evgeny own both the Independent and the London Evening Standard, which employs ex-Chancellor George Osborne as its editor. The Barclay twins, David and Frederick, often appear near the top of the UK’s rich list, with an estimated net worth north of £7 billion. They own the Daily Telegraph and the Sunday Telegraph. All these papers combined have a weekly reach, for only their print editions, near 13 million. They frequently carry front-page stories which promote a political agenda and seek to influence their readers.
The situation is similar in America. As pointed out above, Rupert Murdoch owns both the Wall Street Journal and the New York Post. Jeff Bezos, the founder of Amazon and currently the richest person in the world with a net worth estimated around $160bn, bought the Washington Post in 2013 for $250 million. John Henry acquired the Boston Globe on the same day in 2013 as well. Laurence Powell Jobs, widow of Steve Jobs, last year bought a majority stake in The Atlantic. Biotech billionaire Patrick Soon-Shiong bought both the Los Angeles Times and the San Diego Union-Tribune. These recent acquisitions of outlets by billionaires do not seem to have resulted in a new editorial focus, though it does give them considerably more sway.
Politicians may have always taken Jeff Bezos’s phone call, but now there is more of an incentive to listen to him given that he has transformed the Washington Post into one of the biggest players in the American newspaper scene. The same goes for the other examples mentioned. They serve as good PR exercises, with philanthropic billionaires exercising their financial might in a way that protects their image. Even without the editorial control that some have exerted on papers on the other side of the Atlantic, using these institutions as tools to enhance status undermines their ability to serve the readers’ interests. They certainly can’t be in the industry to make money as it struggles decades on from the rise of the internet to adapt, can they?
But billionaires often look for investment opportunities. Those opportunities are not often obvious, or else many more people would have seized them. They have built their wealth by growing companies. The ability to make a profit from the newspaper industry does seem slim at the moment, but there may be an opportunity with new thinking and strategies. In 2012, the year before Bezos bought the Washington Post, that paper lost $54 million. The Amazon CEO, in a 2014 Business Insider interview, said that while he didn’t know anything about the newspaper business, he ‘did know something about the internet.’ Since coming on board as the head of the Washington Post, the paper has introduced new software centring on gathering and exploiting reader data. A/B testing on headlines and framings have also been introduced. The newsroom at the Washington Post is growing and now publishes 1,200 articles a day. This has all resulted in its website overtaking the New York Times in unique web visitors, and the paper has been profitable for the past two years. Warren Buffett, the doyen of value investing where investors look for a flaw in the valuation of a company and buy if it would be in their favour, has bought 28 papers at a cost of $344 million. The power that introducing new ideas to a paper’s business model can be very positive. But can the success of the Washington Post be translated to the industry at large, at papers without the backing of the world’s richest person or the intellectual capital he can bring and attract to it?
For journalism to survive and even thrive in the 21st century it must be financially self-sustaining. It cannot rely on the largess of tech billionaires to keep going. At any point, this could be withdrawn or those same owners could introduce a new self-serving editorial direction to the paper. Generosity is not a workable business model. An independent and free press, outside the control of governments or entrenched and powerful individuals, is vital to the health of a society. The audience which journalists serve depends upon them to relay accurate and truthful information about how their country is being run and if businesses are taking part in unethical conduct. Reporters recognise this. A recent Reuters report showed that more newsroom staff think it is important to monitor and scrutinise businesses and business practices than it is to do the same for political leaders, but only just. The ability to do so would be greatly diminished if those same journalists were ultimately employed by the magnates they are reporting on.
Journalism can no longer rely on print circulations to remain sustainable. The high number of closures of papers which have failed to recognise this reinforces that fact. Creating much-needed reporting has a cost. Those costs have run up against falling circulation figures and the notion the internet created that content should be free. Chasing advertising money creates its own problem, as we have discussed before, and the fragmented news landscape contributes to consumers rejecting the value proposition presented by paid subscriptions.
Mogul News presents a way out of this predicament. It creates value for the consumer by asking them to pay only one, single, high-value monthly subscription for access to a broad range of content. Newspapers and journalists can benefit by focusing on serving that reader, rather than advertisers or moneyed interests. By being funded entirely by reader subscriptions, journalists will be able to have the audience and how best to serve them as their only considerations.
‘Never pick a fight with a man who buys ink by the barrel and paper by the ton’ goes the old saying. Control of the media allows someone to set the agenda, frame the debate and quash opposing viewpoints. The internet has allowed for freedom of expression to flourish, for people on opposite sides of the globe to talk and share information. There is no need for billionaires to control the media when it can be supported by the people it is set up to serve. The power of the internet lies in connecting people. At Mogul News we are building on that strength to create a platform which allows readers and journalists to connect more directly, which will allow everyone, everywhere, to get a better understanding of the world. Then, working together, a better future can be built.
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