What’s intriguing about Jeff Bezos, who purchased The Washington Post this week, is not that he’s a digital guy or that he has a lot of money—though both certainly help—but that ever since he founded Amazon, he’s specialized in the long view. The company lost money for nine years, and Bezos continues to prioritize long-term investment over near-term profit. That's how great, enduring companies are created or transformed—by building a strong infrastructure, products, brand, and deep relationships with customers. And to their credit, Amazon shareholders are rewarding this strategy and vision. They know there will be time enough to see returns on these investments, returns that will reflect the massive value Bezos is building.
By contrast, too many news companies have been paralyzed by the tyranny of short-term horizons. Media executives under-invested in digital not because they were stupid but because it was actually more rational for them to focus on slowing the decline of their traditional revenue lines—more rational, that is, in the short run. In the long run, of course, that thinking is suicidal. At way too many newspapers, we've seen a decline in the quantity and quality of journalism—the kind of reporting that keeps in check government officials and others with power, the kind of journalism that's as vital to the health of our democracy as it ever was. One indirect measure: the number of newsroom jobs dropped from 52,600 in 2007 to 38,000 in 2012, according to the American Society of News Editors (and yes, reporters usually are required for quality journalism).
As bleak as the industry sometimes seems, the news media can be profitable—but only if companies better serve their customers, transform their business models, and alter their financial time-horizons. That includes having the kind of patience that Bezos demonstrates at Amazon. Outlets that cuts back on basic services—especially reporting—will improve their near-term quarterly profit, but squander the future.
At Amazon, Bezos didn’t just “crack the digital code” in a technological sense; he understood how the Internet changed the economics of serving consumers. And while he looked at the long run, he also pursued the long tail. Amazon mastered the capacity to provide products and services not only for the big sellers but the smaller ones, and not only for buyers who want to buy the biggest selling products but also consumers with unique interests. He did this, for instance, by deploying technology to improve the economics of low-volume sales. With infinite shelf space, he built a business that offers everything to everyone, something you couldn't do in a store, even a big box retailer.
Implicit in the mastery of the long-tail strategy is the idea that a big company can serve each customer with precision, in part by deploying sophisticated data analytics and in part by using technology to efficiently deliver good service to small numbers of people. That is an anathema to some in “mass media,” but news outlets need to embrace that approach if they're to serve readers with enough value to regain relevance. For instance, when a newspaper writes a series about local schools, it provides the same information to every reader. When a newspaper creates a searchable database about the quality of local schools, and gives each reader the ability to select the variables they care most about, then the paper is tailoring the reporting to each reader. One database creates a thousand stories.
This is not to say that a news outlet's strategy should be to offer everything to everyone, but there are no doubt opportunities for the Post to offer more news and information to more people—for example, by becoming the world's leading news outlet covering policy and politics, not only in Washington but in capitals around the world, and covering more topics more deeply. Sure, that would be expensive, but the relevant market for Internet companies today is the world's population, not just the U.S.'s—why not the same for news outlets? Newspapers, like TV stations, never got away from the artificial boundaries drawn by their distribution technologies: for newspapers, the reach of their physical distribution; for broadcasters, the reach of their antennas. Now they can imagine distribution patterns focused on topic or audience rather than just geography.
News organizations have to figure out ways of serving a wide range of readers and viewers, and in deeper ways—not merely pitching to either the lowest common denominator or the most affluent (the two safest business models). Financial journalism is doing well, as are celebrity slideshows. What’s hurting is labor-intensive reporting on whether, say, city hall is squandering money, the zoning board is ruining a neighborhood, or police are killing innocent people. This kind of reporting takes money, patience, and the belief that these civically worthy endeavors will create such good will with the customer (and local businesses) that the company will benefit in the long run.
Finally, Bezos is an intriguing media mogul because he’s succeeded at getting consumers to pay for things—as he did with Amazon Prime, a monthly subscription that includes unlimited free shipping, an online video service, and more. For decades, the newspaper publisher has focused on gaining advertisers. Now, publishers must be just as focused on creating products that readers or viewers will pay for. Although most of the debate has centered on paywalls, media should contemplate a much wider range of products: hosting events, publishing e-books and Kindle singles, and the video streaming of high school sports, to name just a few. News media need to be asking themselves: Why didn’t we invent Angie’s List, Monster.com, fantasy football, or other products that are generating revenue in areas that newspapers used to dominate?
The good news for Bezos is that he's acquiring one of the strongest traditional news businesses, certainly measured by commitment to principles of journalism and the value of hard reporting. (And Don Graham, the chairman and chief executive of The Washington Post Company, saw the digital currents coming and kept the ship afloat and sturdy through a tough storm—no small task.) It’s exciting to see one of the men who made his fortune in the digital disruption turn his attention to reinvigorating one of the potential casualties of that turmoil. We don't know if Bezos bought the Post as an act of altruism or business genius, or something in between. What we do know is that, at Amazon, he learned, and taught, the right lessons. “The three big ideas at Amazon are long-term thinking, customer obsession, and willingness to invent,” Bezos said recently. Precisely the ones the news industry now needs.