When you visit Politico and Washington Post during the same week, making some comparison is inevitable. I see Politico as a young lion, full of energy, whereas Washington Post seems to be old and tired lion. But is it possible for the old lion to reform itself?
Founded in 2007, Politico has been one of the most interesting success stories on US media scene. Its money comes from traditional ads in printed newspaper, ads in free version of its webpage and from Politico Pro, a service for people who work in Capitol and other political junkies. The sponsored events also play some part now in Politico’s growing revenue flow. They are not revealing any numbers, but according to Politico’s reporter James Hohmann, they became profitable in three years. While they now have about 250 employees, soon it will be 300, Politico Pro’s editor Martin Kady tells us. The newsroom is growing out from its current office.
We visited Politico the same morning Politico’s founder and publisher Robert Allbritton announced acquiring Capitol New York. He plans to make “a substantial investment” in the business and more than quadruple staff. His goal is to apply Politico’s business model to New York.
“In 2008 when we were a new player, they [the journalist in other newspapers] dismissed us. But when we started to break the news, they had to follow. We are hungry and we fight hard. We are a garage band and a startup”, James Hohhman says.
If you happen to work in Politico, your job might be safer right now than in most traditional newspapers. That is because they have an owner who has the will and means to invest in journalism. Allbritton sold his family’s local TV stations for $985 million in July and said he would use the money for investing in Politico and other media.
Even though The Washington Post now also has a rich owner, the atmosphere in the newsroom was not as energetic as in Politico. Amazon founder Jeff Bezos is buying Washington Post for 250 million dollars. According to the articles in New York Times and Washington Post the staff was relieved and excited after Bezos first visit in newsroom. Despite of that, we met three tired and men didn’t seem to have a clear vision about the paper’s future.
“Bezos is interested about the broken business model of the newspapers and he wants to repair it. He is waiting growth and more readers from us and that puts lot of pressure on us. He is going to be watching closely what we are doing”, Washington Post’s Executive Editor Martin Baron says.
“The great thing about our new owner is the energy and enthusiasm when he speaks. He has invested on us and he believes that the story is not over yet.”
Mentioning Politico clearly touches sensitive area. Baron’s reaction is defensive and perhaps even a little bitter.
“Politico does a good job and it is admirable that they have managed to create something out of nothing. But the idea that they would be a threat to Washington Post is nonsense. An idea that everyone in Washington would be reading Politico is not true. We are setting the agenda not they. They did not do the NSA papers – we did. They don’t do investigative journalism like we do”, Baron says.
At its best Washington Post had about 900 employees, now the number is 630. The Post has had seven years of declining sells and according to its annual filings the newspaper division reported widening losses in the past two years, including a $53.7 million loss in 2012.
The 250 million dollars Bezos is using for the acquisition is little compared to 315 AOL used when it bought Huffington Post three years ago. The difference is that Huffington Post’s (and Politico’s) business model is built in and for the digital era. Huffington Post and Politico are promising growth companies with a large online community. That is more interesting for investors than a print newspaper – even one with as prestigious brand as Washington Post’s.
Not everyone believes that Bezos has a solution how to repair the broken business model. For example Post’s technology journalist Timothy B. Lee is criticizing his ideas in a blog post: Sorry, Jeff Bezos, the news bundle isn’t coming back.
But there is something comforting and encouraging in both cases. At least someone (with money) still believes in journalism and wants to invest in it.