Who Killed the Washington Post?

Jeremy Peters had a story about the Washington Post in Sunday’s New York Times that was fascinating on a number of different levels. Though every newspaper’s misery is a product of its own history, market and the family behind it, all newspapers suffer the same affliction as they move from the relative riches of print-based advertising to the relentless treadmill of internet ad rates. Simply put, newspapers can’t balance the demand for content with the tiny price paid by advertisers which leaves them operating with chronic deficits.

That, of course, is the unstated subtext of the story. Things might be bad at the Post but management at the Times—which abruptly threw over its CEO two months ago—is pretty bad too.

Until very recently, the Washington Post seemed to be in a much better position than the New York Times. The Times made numerous financial mistakes that squandered hundreds of millions of dollars in years leading up to the crisis. The Post, on the other hand, was cushioned by the runaway success of Stanely Kaplan until the government got wise to the rampant abuses in the for-profit education sector:

The Post faces the same problems as other daily newspapers, whose revenues have sunk as the Web and the tough economy have sapped advertising. But in some ways, its situation is even more daunting. Unlike most other papers with national aspirations, The Post serves a purely local print market, one that for decades had limited competition, and it has depended on local advertisers and subscribers who have since fled to the Web.

Though company managers say privately that The Post is modestly profitable, its newspaper division, which also includes a group of community papers and The Herald of Everett, Wash., reported an operating loss of nearly $26 million through the first three quarters of last year.

Compounding its troubles, The Post’s safety net ripped a giant hole. For decades, The Post could rely on Kaplan — the money-minting, for-profit college and test-preparation business that the company bought in 1984. But Kaplan has been squeezed under the weight of new federal rules that place greater limits on how for-profit colleges can recruit and enroll low-income students.

What’s really interesting about Peters’s story isn’t that turn of events. Instead, it is the rampant nostalgia that seems to overhang the Washington Post. Decades after Ben Bradlee and Kay Graham handed the reins over to another generation, Post-men still hark back to those leaders as a touchstone of the paper. It’s as if nothing of merit happened at the paper during Len Downie’s 17 years at the helm. At least, no one is telling those-were-the-days yarns about Downie’s paper.

Downie isn’t the villain here, though. In Peters’s story, Marcus Brauchli and Katharine Weymouth are depicted as the wooden and mechanical replacements for the dynamic figures of yore. They’re the disappointing kids who ran the family business into the ground.

But is that really what ailes the Post? Perhaps in the newsroom but not within the larger strategic landscape.

The Washington Post suffers not from its failures but from its success. Like the Los Angeles Times, the Post built its base as a regional media powerhouse with deep connections to Washington, DC’s growing suburbs and exurbs. For years where the New York Times was going national, the Post showed that really profitable media was all local.

For a while, the Post compensated for its focused footprint with canny traffic deals. Hook-ups with MSN gave its digital properties the kind of broader exposure that usually comes from being part of larger media conglomerate.

Those deals have sunset; and, though Donald Graham remains a canny media politician—his courting of Microsoft was followed by his recent friendship with Mark Zuckerberg—there is a disconnect between the reach of a media outlet and its ability to generate revenue. (That’s something he shares with Zuckerberg.)

It would be more satisfying to locate this failure to generate revenue in some personal failing or dynastic declension. But no honest analysis could really come to that conclusion. The Grahams are playing the hand they were dealt as best they can. They’ve certainly played the game better than the Sulzbergers even if the Times has emerged as the vastly more influential newspaper.

The Times’s own story reminds everyone that the continuing failure of the advertising model of media has not reached a real resolution. Until someone figures out how to support the large cast it takes to produce a high quality news report, we’re going to see more of these finger-pointing stories.

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Source:
A Newspaper, and a Legacy, Reordered
Jeremy W. Peters
New York Times; Feburary 12, 2012
http://www.nytimes.com/2012/02/12/business/media/the-washington-post-recast-for-a-digital-future.html?_r=1&ref=business&pagewanted=all

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