Kneale: The BusinessWeek Sale ... A Harsher Truth
Who are these Bloomberg guys?
The move by Bloomberg LP to buy out the red-ink-stained wretches and assets of BusinessWeek reveals some painful truths about the ailing print media industry its future. If it has one.
At first glance the deal seems ideal: a magazine buffeted by the online revolution gets rescued
by a newer media titan that trades in digital bits rather than in printed words on a page. Content, not distribution, is king.
The harsher truth: The main reason Bloomberg could afford to buy McGraw Hill's BusinessWeek , at all, is because Bloomberg isn’t truly a media company. Its media pursuits amount to a loss leader that will rack up $150 million in red ink this year, by some estimates. This “investment” is offset by the privately held company’s core business: leasing data-analytics terminals to fat Wall Street firms.
That’s troubling at a time when some voices call for a philanthropic, non-profit model for the print media, a la the St. Petersburg Times. It’s a terrible idea, ignorant of the fact that print pubs in good times have handsome pre-tax profit margins of five or six times the level in, say, high-tech. If newspapers and magazines can’t survive on the profit model, they’re doing something wrong.
Which leads to a second harsher truth: The problems at BusinessWeek, expected to lose $40 million this year, and across the print media world were intensified by online upheaval. But the troubles are as much a consequence of moves and miscues by the ailing players themselves.
Newspapers and magazines, beleaguered by decades of declining readership, took few daring risks to appeal to new customers. Their newsrooms bitterly resisted any attempt to cut expenses, depicting it as a sin rather than the necessity it really was. And most of them greeted the rise of the Internet with fear and defensiveness rather than embrace it as a compelling opportunity for new ideas and new growth.
I saw this first-hand, from posts at The Wall Street Journal and Forbes over the past two-plus decades. Both titles plunged headlong into online journalism and are better off for it.
The print media can survive and thrive if companies will surrender to the Web and restructure and jump on new opportunities online. We always underestimate how long an old platform can withstand a new challenge, and we overestimate how quickly the latest tech will overtake incumbents. A Kindle-like tablet could be their savior ultimately, and in the meantime print remains a highly profitable business once expenses are cut to fit the revenue stream.
But survival requires getting some real attitude.
Afraid of losing the 50 million readers they have left, too many newspapers cling to the modus operandi of the past. Same for magazines. In the blindingly fast Internet Age, BusinessWeek peddled a weekly summary that was . . . boring. Safe. Assiduously objective rather than provocatively opinionated. The magazine took pride in this sense of remove, this lack of passion.
Time Warner’s Fortune is splashier and poses as the People of business. Family-owned Forbes, where I was managing editor until joining CNBC two years ago this month, is fearless and ferocious in its promotion and protection of capitalism and wealth creation. Both titles face new rounds of cuts, too, but at least they aren’t up for sale. Yet.
BusinessWeek’s disinterested bent fits well at Bloomberg, one of the first online news companies when former Merrill Lynch trader Michael Bloomberg formed it in the early 1980s. At Bloomberg, reporters are all but banned from writing with too much, um, feeling. Words like “but” and “however,” used to build and depict conflict, are excised, as are adjectives that could be deemed as being opinionated.
What are these guys thinking? Bloomberg has built a world-class org of 2,200 journos, packing in legions of laid-off defectors from The Journal, but they fail to realize that nobody really wants to read anything, ever. Ya gotta get ’em in the tent, grab ’em by the shirt collar and wake ’em up. You do that by pushing a provocative point of view and wrapping news coverage around it.
Readers no longer expect flat, passionless objectivity, if they ever believed it to begin with. They expect a publication or writer to prosecute a case, and then the reader can decide whether the argument holds. Hewing strictly to neutral, and neutered, observations, as BusinessWeek does, won’t work in the online sizzle of constant news updates, colliding opinions and abundant bad-ass attitude.
The Bloomberg acquisition could provide a clear test of whether the journalism of old—we called it “DBI” for “dull but important” when I worked at The Wall Street Journal 20 years ago—can sell in the Netstream of today. Or it might not be a test at all. Given Bloomberg’s richer business renting data terminals to trading firms, maybe the company doesn’t care whether its soon-to-be-acquired property ever turns a profit.
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