Billionaire Jeffrey Bezos to purchase Washington Post
By Andre Damon, wsws.org
Bezos: His tenure can only mean further deterioration for the WaPo.
The Washington Post, one of the United State leading national newspapers, announced Monday that it had been sold for $250 million to Jeffrey Bezos, the multi-billionaire founder of online retail firm Amazon.com.
Bezos’ purchase of the WashingtonPost is only the latest in a series of acquisitions of major newspapers by wealthy investors. It comes only days after billionaire hedge fund manager and Boston Red Sox owner John Henry announced plans to buy theBoston Globe from the New York Times Co.
The sale follows reports that several billionaires, including the Koch Brothers, key backers of the right-wing Republican Tea Party movement, have been looking into purchasing the Los Angeles Times, one of eight newspapers that the Tribune Co. has been seeking to sell.
The Washington Post, the leading newspaper in the nation’s capital, is known for having published the Pentagon Papers in 1971 and helping to expose the criminal activities of the Nixon administration related to the Watergate scandal, which led to Nixon’s resignation in 1974.
Since then, along with the rest of the US “mainstream” media, the Post has moved steadily to the right, backing the US wars in Afghanistan and Iraq and editorially lobbying for more aggressive action in Syria and elsewhere. In domestic policy, it has generally supported the attacks on democratic rights carried out in the name of the “war on terror.” It defends the NSA mass spying operations and supports austerity measures against the working class.
The newspaper has a national readership and a daily circulation of nearly 475,000. It has been owned by the Graham family for 80 years.
Bezos, with a net worth of $25.2 billion, occupies eleventh place on the Forbes 400 list of the wealthiest people in the United States. His company, Amazon.com, began as an online bookstore, but has increasingly sought to corner the market for Internet retailing. In addition to retail, the company sells computing services and manufactures the Kindle tablet series, and has made forays into publishing.
The sale of the Washington Post has been cited by commentators as heralding a return of the era where newspapers were owned by industrial moguls to advance their own interests and as a source of prestige. “In the olden days, [newspapers] were owned by wealthy individuals because to some degree they made money, but also because they gave them a sense of stature and power in their communities,” consultant Alan Mutter told theWashington Post. “It’s not so much that we’re going back to some format. It’s that what we had in the post-World War II era was the anomaly.”
In acquiring the Post, Bezos has sought to present himself as the newspaper’s benefactor and savior from the vicissitudes of the stock market. Donald Graham, chief executive of the Washington Post Co., struck the same tone, writing: “As the newspaper business continued to bring up questions to which we have no answers, Katharine [Weymouth] and I began to ask ourselves if our small public company was still the best home for the newspaper. … Our revenues had declined seven years in a row.”
Bezos’ purchase of the Washington Post comes as traditional print newspapers are grappling with diminishing revenues, with readers increasingly turning to free Internet news sources. The Newspaper Association of America reported that advertising revenues for print newspapers fell by 55 percent between 2007 and 2012, forcing many newspapers into bankruptcy.
The financial difficulties of print newspapers have contributed to the current wave of sales to multi-millionaire investors, who are buying up major newspapers for a fraction of what they would have been worth ten years ago. Last year, Warren Buffett’s Berkshire Hathaway purchased 28 daily newspapers for a total of $344 million.
Bezos has been tight-lipped in public about his political leanings, and has contributed relatively modestly to both Republican and Democratic campaigns. His largest political contribution was a $2.5 million donation to a drive to legalize same-sex marriage in Washington State.
His company, however, is notorious for paying poverty wages to its warehouse employees. The average warehouse associate starts at $11 per hour, or about $23,852 per year. The company has received major tax abatements in areas where it has set up warehouses. It has, for instance, received a sales tax waiver from the state of Tennessee for setting up a pair of fulfillment centers there, including one visited by President Obama last week.
Working conditions at the Amazon fulfillment centers are reported to be abysmal. The Financial Times reported in February that workers “might walk between seven and 15 miles” each day, and “must walk through a set of airport-style security scanners to prove they are not stealing anything” at the end of their shifts. The report noted that “a very large number” of workers are fired “frequently and with little warning or explanation.”
The Seattle Times on April 3, 2012 reported that Amazon workers were threatened and in some cases fired for reporting workplace injuries to the Occupational Safety and Health Administration, and a class-action lawsuit is currently pending against the company for short-changing workers’ paychecks.
Despite Bezos’ own claims that he will seek a “hands-off” role in running theWashington Post, the fact is that his purchase of the newspaper gives him control over one of the world’s leading news outlets and vastly increased influence over the flow of public information. It underscores the dominance of a small group of billionaires over all aspects of social and political life.
The acquisition points to the fact that no “free press” is possible under capitalism. In reality, the entire news media, from television to the newspapers, are owned and controlled by representatives of the corporate-financial elite. Their class interests determine what is revealed to the public, what is suppressed, and the manner in which events are presented.
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The wsws.org site is an information arm of the Social Equality Party.
ADDENDUM 1
Okay, Here’s The Real Reason Why Jeff Bezos Bought The Washington Post
Yesterday, it was revealed that Jeff Bezos is buyingThe Washington Post, one of America’s most venerable and respected media outlets for $250 million.The move came as a surprise to just about everyone involved as the talks were conducted under the utmost secrecy, although they had been going on since March or April, according to The Washington Post.
The question that still remains is why: Why would a technology entrepreneur invest in a stodgy media outlet in a declining industry? Was the motive for the move sentimental altruism or profit?
I think Henry Blodget at Business Insider hit the nail on the head in his piecewhen he said that:
Content and commerce companies have long dabbled with combining the two experiences, but no one has really nailed it. Given Amazon’s expertise in affiliate marketing and advertising, it’s not hard to imagine that the Washington Post could quickly become a laboratory for the next generation of integrated content and commerce.
To understand what that means, let’s look at 3 salient aspects of Amazon’s business:
E-Commerce: First, the obvious. Amazon is in the business of selling things. From books to electronics to household goods, they offer a supremely efficient platform that allows consumers to buy just about everything under the sun quickly, easily and have it delivered right to their door.
Affiliate Marketing: Through Amazon Associates and other programs, media outlets can be paid for referring consumers to Amazon owned sites for a cut of the revenue on any sale that results from the visit.
Essentially, Amazon reverses the practice marketers call “Cost per Action” or CPA. Media companies routinely offer advertisers the option of paying a predetermined price for the activity that their ads create, such as making a purchase, signing up for a subscription or watching a video. With its Associates program, Amazon provides content creators the opportunity to monetize links in much the same way.
Video Production: As I explained in back in May, Amazon has gotten into video production in a major way with Amazon Studios. This past spring, the announced 14 pilots, including the comedy Alpha House starring John Goodman and written by Doonesbury creator Garry Trudeau.
I said at the time that, effectively, “Amazon Studios serves an incredibly elaborate form of content marketing to sell books, electronics and household goods.”
And that’s why the purchase of The Washington Post makes good business sense. For decades there has been precisely two business models for media: Advertising and subscription.
Today, we’re seeing a third one emerge, content as a promotional tool. Marketers from Proctor & Gamble to Nike to Microsoft MSFT +1.53% are developing their own content to reach out to consumers directly, without going through a third party media outlet.
Amazon’s purchase of The Washington Post represents the next logical step in “owned media,” the purchase of a major media outlet by a major marketer in order to sell directly to the public.
In effect, e-commerce is starting to play the role once solely reserved for advertising, monetizing content through promoting the sale of products and services.
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