Editor's Note: The following is a guest post by Zachary Karabell, head of global strategy at Envestnet.
The death of the old media has been long heralded. We have been told endlessly that print is dead, and that the only future of news and analysis lies online. Yet reports of the demise of print, however hyperbolic in their appeal, appear to be overstated. This week alone, we will see the return of Newsweek to print editions, and Forbes is likely to soon announce its sale to continue life, with increasing emphasis on its international presence.
Sometimes new technologies completely overwhelm the existing system. The automobile did spell the end of horse-driven buggies. But often these changes are more like overlapping waves. The new comes in with a rush, but the old continues. That’s what we are seeing with the print media. It suffered mightily over the past 15 years, as advertising rates and overall spending plummeted and migrated to new platforms, with many regional newspapers dead and buried along with once-prominent magazines, we are seeing a revival of sorts.
But it isn’t the one we expected. It is largely driven by billionaires making – for them – modest investments. Jeff Bezos of Amazon (AMZN) buys the Washington Post for $250 million. John Henry buys the Boston Globe for $70 million. Warren Buffett invests in a series of small regional newspapers. Chris Hughes of Facebook (FB) takes on the New Republic. Carlos Slim, Mexico’s wealthiest man, helps float the New York Times (NYT). The Los Angeles Times looks likely to be bought by a consortium of LA moguls. And to augment those investments, ad dollars are slowing returning.
In all of this, we ought to remember that many print publications never made much money. They were often used as megaphones for the wealthy and passionate. They often generated only modest margins. And that was just fine.
Once the expectations that these businesses to make double-digit returns fades, we are left with potential vibrant platforms underwritten by plutocrats to enrich the public conversation
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- Zachary Karabell