WHAT do Alibaba’s Jack Ma, Amazon’s Jeff Bezos and Silicon Valley entrepreneur Laurene Powell Jobs have in common?
The three investors have bucked the trend by buying into the legacy newspaper and publishing business despite the bearish outlook of the sector, with some detractors arguing that print is dying or dead.
Ma bought into South China Morning Post (SCMP), the 114-year-old English-language newspaper, in late 2015, raising eyebrows over why his China e-commerce giant was investing in a traditional print business, which others have shunned.
There had been concerns, too, about SCMP’s content direction, with some people suggesting that the newspaper, which had for decades been reporting aggressively on China, might now avoid incurring the wrath of the Chinese leadership.
Alibaba, the world’s biggest online trading platform, is aggressively developing big data and cloud technology.
Every day, it analyses and processes a massive volume of data that can provide powerful insights into China, the world’s second largest economy.
A lot of people were surprised, too, when Amazon.com CEO Bezos bought The Washington Post for US$250 million in 2013.
Like SCMP, at the time, the Post was a legacy media company facing years of readership and circulation decline, while the Amazon boss had no prior experience in the newspaper business.
Amazon, by the way, is the world’s largest online shopping retailer.
But in less than 36 months, Bezos completely overhauled the outlook for the 140-year-old newspaper. Its readership has soared, and its content has become more relevant to the digital world.
The latest to join the bandwagon is Laurene Powell Jobs, the Silicon Valley entrepreneur and philanthropist. She is buying a majority stake in The Atlantic magazine.
She has described the 160-year-old publisher as “one of the country’s most important and enduring journalistic institutions”.
Jobs, whose estimated worth exceeds US$20 billion, has made media investments in the past, including a minority stake in Hollywood studio Anonymous Content, as well as supporting nonprofit journalism organisations like the Marshall Project and ProPublica.
Like other print titles around the world, The Atlantic has over the past decade been trying to reform itself for the digital age.
Its transformation effort has yielded some results. Digital advertising now accounts for 80 per cent of revenue and the company draws an audience of 33 million a month and makes profits exceeding US$10 million per year.
How is SCMP, the Hong Kong media firm, doing under Ma? He has appointed a 35-year-old American of Taiwanese parentage as the new CEO.
Gary Liu, formerly the head of content aggregator Digg and Spotify Lab, joined SCMP 10 months ago to help realise Alibaba’s vision to transform SCMP into a global media agency with the assistance of Alibaba’s technology and resources.
“With its access to Alibaba’s resources, data and all the relationships in our ecosystem, SCMP can report on Asia and China more accurately compared with other media, who have no such access,” Ma has said.
Liu, who was in Singapore last week meeting CEOs and top editors of other Asian publishers, did not mince his words when he said that it is the publishers’ fault that the newspaper industry is dying.
“That means we’re not listening to our consumers: we don’t realise they’ve already made a choice.”
“Millennials are in their 30s now. We talk about Generation Z most of the time… They are spending eight hours online a day of their own accord. Fifty-two per cent of their time is smartphones, and there are three apps they spend their time on — Facebook, YouTube and SnapChat in the US.”
Liu said newspaper owners and editors cannot blame readers for deserting them. He said the onus is on publishers to provide relevant content to readers anytime, anywhere and on any platform.
He also said newsrooms that fail to think like tech companies will become “irrelevant”, arguing that would be “really bad for the world”.
As such, SCMP has hired some 120 people in its research and product development division — a tenth of its overall workforce.
“If we as news companies are not committed to becoming technology and product companies, there is no reason for us to continue,” he said at the World Association of Newspapers conference in Singapore.
What can Malaysian and other Asian newspapers learn from SCMP or The Washington Post?
For sure, the newspapering business needs a commercially viable business model as it moves into digital to pay for the generation of content that the audience needs and wants.
All this while, display advertising has footed the bill. But the print advertising dollar is shrinking. Online advertising is growing but most of the money somehow goes to Google and Facebook.
The shift to digital, the democratisation of news and the pressure to provide content for free have turned the traditional news business upside down.
The mistake legacy print publishers make is that they give away their online content for free.
Some publishers have succeeded in putting up paywalls but by and large, it is difficult to charge for content. It is like trying to squeeze toothpaste back into the tube.
Job losses have been the norm rather than the exception, with leading publishers like Singapore Press Holdings Ltd (SPH), the Star Media Group Bhd and Media Prima Bhd having to trim their headcounts in the last few months.
“Like media groups everywhere, our newsrooms face some serious challenges. There is no room for complacency,” said Warren Fernandez, Editor-in-Chief of English/Malay/Tamil Media and Editor of The Straits Times at SPH.
SPH last month cut its headcount by 230, including in the newsroom.
The 230 people included 130 across SPH who were retrenched, with the remaining 100 coming from reductions due to retirement, termination of contracts and roles that would be cut as a result of the restructuring of work processes, he said.
Perhaps, we publishers can learn a thing or two from Amazon’s Bezos, who has turned the Post into profit.
He told newspaper publishers: “Ask people to pay. They will pay.”
Speaking at the Future of Newspapers conference in Turin, Italy in June, he said publishers should focus on readers first and ask them to pay.
“When you’re writing, be riveting, be right, and ask people to pay.”
The writer feels in a digital world, the winner does not always take all