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Opinion

Newspapers Are Becoming the Toys of Billionaires

In this column, Roberto Savio, founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News, writes about the future of newspapers.

SAN SALVADOR, Sep 4 2013 (IPS) - Few people today know that when the first news agencies were created in the 19th century, the French Havas and the British Reuters divided the world between themselves.

The division followed the borders of the two colonial empires, and Latin America, for example, basically went to Havas while Reuters had the United States.

Roberto Savio

Roberto Savio

United Press International (UPI) was the first American agency to break the monopoly, claiming that America could not be seen through British eyes (very much the same cry from the Third World against the North’s monopoly of information) and, for many years, UPI was considered one of the media world’s giants.

So it came as a shock when a Mexican millionaire, Mario Vázquez Raña, bought UPI in 1986 for 41 million dollars, famously declaring: “I had two Falcon jets. I sold one and I bought UPI.”

Since then, the concentration of the media in the hands of millionaires and billionaires has continued unabated. The cases of Rupert Murdoch and Silvio Berlusconi are the most famous.

But concentration of the media in fewer and fewer hands is a global phenomenon. Some media observers see in this a turn to the right, propelled by those with money. It is not a plot; it is simply that 100 people who own a Ferrari tend to have a more similar view of things than, for example, 100 people who own a Volkswagen.

The United States is a good observatory on the world of information. It was in the U.S. that the expression “mass media” was coined in the wake of the attempt to sell a very large number of newspapers in order to be viable. In Europe, on the other hand, newspapers were for a small elite, not for the masses.

The famous Times of London (now owned by Murdoch), for example, sold only an average of 50,000 copies, all for the British Empire’s elite. In fact, European newspapers were “cultured”, with long articles and lots of analysis, and language was very important. Media in the U.S. went in the opposite direction, and the mass media were born.

In the last few weeks, an impressive number of prestigious U.S. newspapers have been bought by billionaires. The most famous case is the Washington Post which, along with the New York Times, was considered a leader among U.S. media.

The Post had been held by the same family, the Grahams, for 80 years. It was bought by Jeffery Bezos, the founder of Amazon.com, for 250 million dollars. This represents one percent of his personal wealth (Amazon has a market capitalisation of 135.2 billion dollars). But the Post sold several others local papers in the package, which was evaluated 10 years ago at five billion dollars.

This is one final nail in the coffin of family-owned newspapers. The Chandler family once owned the Los Angeles Times, the Copley family the San Diego Tribune, the Cowles the Minneapolis Star Tribune, and the Bancrofts the Wall Street Journal; these families defended the independence and identity of their newspapers.

But all that is changing, or has already changed. A good example comes from comparing the WSJ during the time of the Bancrofts and now that it is under the ownership of the ubiquitous Murdoch. It is now practically aligned with Fox TV, another Murdoch acquisition. The Boston Globe was purchased by another billionaire, John Henry, for a mere 70 million dollars. The New York Times paid 1.1 billion dollars for the Globe in 1993.

The question is how long the New York Times will last as the last iconic family newspaper, owned by four generations of Sulzbergers since 1896. It is not losing money, but it is a butterfly fish in a world of sharks.

It has a market capitalisation of 1.69 billion dollars against Murdoch’s News Corporation’s 56.66 billion, the Bloomberg family’s 27 billion, Facebook’s 93.86 billion and Google’s 282.04 billion. In other words, big money is now doing the talking and, in that sense, the future of the battle is online.

The Alliance for Audited Media has reported a dramatic reduction in sales of magazines. Newsweek was bought for one dollar in 2010, and magazines from Vogue to Vanity Fair and from People to Metropolitan have all suffered a similar fate. On the other hand, the AAM reports that online subscriptions reached 10.2 million in the first half of 2013, almost double the 5.4 million for the same period in 2012.

The New York Times has aggressively started online subscriptions, and has already reached more than 60,000 subscribers. It is confident that this will make the newspaper viable for a long time, and has announced that it is not for sale. But what is becoming clear is that the distinction between media producers and systems of distribution is disappearing.

Google, Facebook, Microsoft and Yahoo are looking for more news to transmit, to increase advertising. By buying YouTube and Zagat, Google has squarely moved into the content arena. Yahoo has now bought a new medium, a micro-blogging system that today allows 119 million users to quickly post words and pictures, for 1.1 billion dollars, more than three times the combined sale prices for the Post and the Globe. So, prestigious names come cheap!

The problem is that the online subscribers represent an anthropological change from the old-style readers. They are restless minds, who love to shift from page to page, and long articles and analysis will progressively shrink. Increasingly, this is going to be the case as the next generations grow up.

A major study on young people between 14 and 16, carried out at the University of Paris Sorbonne, shows that they have an attention span much shorter than that of their parents (as any teacher today can confirm).

And for those young people, the borderline between traditional professional journalism and so-called citizens’ journalism, practised by anyone who wants to post news and photos on the web, is disappearing.

As a result, anything over 850 words (like this very summary article, which is over 1,000 words) is no longer considered fit for printing … does this bode well for a better informed and more aware world?

(END/COPYRIGHT IPS)

 
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  • http://www.azalaymedia.com/ Jonathan Gilbert

    A little point on the emergence of mass media – It has existed since the invention of the printing press, but became a universal phenomena in the 19C, following the emergence of mass education. The first high-circulation newspapers arose in London in the early 1800s. However, when The Daily Mail was founded in 1896, it ushered in the time of populist newspapers. By 1902, the paper’s circulation was over a million, making it the largest in the world. From the start, this paper was designed for the lower-middle classes. Therefore, it would be incorrect to assert that mass media is an American phenomenon, while European papers were purely for the educated elite.