Tech Wealth and Ideas Are Heading Into News
By David Carr
Producing serious news is an expensive enterprise with a beleaguered business model, one that remains tied to the tracks as a locomotive of splintered audiences and declining advertising hurtles toward it.
But just when it looked as if all were lost, an unlikely cavalry has come roaring over the hill with serious money, fresh ideas and no small amount of enthusiasm. Silicon Valley and its various power brokers — some who had roles in putting the news business in harm’s way to begin with — are suddenly investing significant sums of money in preserving news capacity and quality.
Pierre M. Omidyar, the founder of eBay, revealed last week that he would back the journalist Glenn Greenwald and his colleagues in a newly conceived news site to the tune of $250 million. Just over two months ago, Jeff Bezos, the founder of Amazon, spent the same amount to personally buy The Washington Post. That’s half a billion dollars dropped into serious news production, a sector that investors in distressed assets have been fleeing.
It doesn’t stop there. In July, Laurene Powell Jobs, widow of Steve Jobs, invested in Ozy Media, a news start-up, joining a group that includes the angel investor Ron Conway; Larry Sonsini, a lawyer from an eminent Silicon Valley law firm; Dan Rosensweig of Chegg.com; and David Drummond, Google’s chief legal officer.
Chris Hughes used his Facebook money to buy The New Republic and provide financial support to Upworthy, an aggregator of quality material. Next-generation news companies including Vice, Vox Media, BuzzFeed and Business Insider have all recently received significant investment. (In addition, Jeff Skoll, another eBay alum, backed Participant Media and now the TV channel Pivot, to make “socially relevant” films and television.)
The list goes on, but the trend is clear: quality news has become, if not sexy, suddenly attractive to smart digital money. It makes sense once you step back. For all its excesses, Silicon Valley has not been a place where ostentation creates social capital. While any tech reporter will tell you that the valley is far from media-friendly, the people in leadership there are close, ferocious consumers of news and have strong opinions about its current shortcomings. And it would be a mistake to view the recent moves by some of the most important people in technology as a lark.
“Technologists have a view, perhaps inflated, that they can make the world better,” Mr. Omidyar said in an interview over the weekend. “There may be limits to doing it only through technology, or perhaps you get tired of doing it only through technology. So getting into content and broad communication is appealing.”
It would also be a mistake to believe that the only thing digitally enriched players bring is money. The investment of intellectual capital will be just as important. If ever an industry was in need of innovation — of big ideas from uncommon thinkers — it is the news business.
“I think that technology could help find a way to actually do important journalism for our democracy that can impact many more people and help serve it to a general-interest audience in a way that can be commercially sustainable,” Mr. Omidyar said. (A separate article has more excerpts from the interview with Mr. Omidyar.)
Smaller companies have created news sites that point a way forward but cannot begin to fill the loss of journalistic capacity that accompanied the great shakeout in the industry. For a time, it seemed as if newspapers, where much of journalism’s horsepower is stored, would either be strip-mined or become a plaything.
“People have been speculating that newspapers would become nothing more than trophies for rich businesspeople at the end of their careers,” said Michael Zimbalist, vice president for research and development at The New York Times. “But now successful midcareer entrepreneurs are investing and willing to play the long game. They have been disrupters themselves and won’t be bringing the same assumptions to the table.”
A profound reset is under way. In more than a decade of covering the news end of the media business, I cannot think of a time of greater optimism or potential. Nontraditional operators like Mr. Bezos can afford to adopt a long-term strategy, something he has done rather effectively at Amazon. And the barriers to entry for ventures like Mr. Omidyar’s start-up have evaporated: cheap digital tools enable production and collaboration, while social media like Twitter and Facebook enable the spread of content through sharing.
Technology and journalism, former antagonists, are about to give bromance a try, with Mr. Bezos and Mr. Omidyar leading the way. Read more in the New York Times.