The Brutal Truth About Jeff Bezos' Purchase of The Washington Post
Yesterday, as NYTimes.com -- and much of the rest of the webby media establishment -- was buzzing about the announcement that Jeff Bezos is buying the Washington Post, the print edition of The New York Times was still serving up a rather sour tale about the Amazon founder-CEO's legacy as an entrepreneur. Spread across the top of the front page of the Times' business section, a story titled "In Germany, Union Culture Clashes With Amazon's Labor Practices," by Nick Wingfield and Melissa Eddy, began,
In the United States, technology giants like Amazon are often celebrated as fonts of innovation and jobs. But across the Atlantic -- nein, non, no.
Wingfield and Eddy report that Amazon has lately been subject to strikes at its warehouses in Germany, its second-biggest market, and that the company is under fire for importing "American-style business practices -- in particular, an antipathy to organized labor -- that stand at odds with European norms."
The piece paints a picture of a company, under Bezos' leadership, that has successfully repelled efforts to unionize its workers in the U.S. -- workers who have sometimes been subject to atrocious working conditions. Wingfield and Eddy cite a 2011 report about Amazon's literal sweatshops:
Two years ago, an investigative article by The Morning Call newspaper in Pennsylvania's Lehigh Valley chronicled poor working conditions in an Amazon warehouse in the state, including instances where it stationed paramedics outside to take heat-stressed workers to the emergency room. Amazon says it has addressed the problem by installing air-conditioning in all of its facilities.
So yesterday, while the webby commentariat was pontificating about what it means that a "visionary" entrepreneur has decided to "rescue" one of the crown jewels of American journalism, the inky edition of The New York Times was describing the man's company as a ruthlessly competitive global juggernaut with highly questionable labor practices. Amazon, Wingfield and Eddy suggest, can't even begin to contemplate the possibility of bargaining with workers, because it ultimately wants to get rid of those workers: "Last year," they write, "the company spent $775 million to buy a manufacturer of robots that it plans to eventually deploy in its warehouses, though it has not said when they would come to Germany. The last thing it wants is to have to get approval from unions for such changes."
Last night, just after 8 p.m., Salon published a column by Andrew Leonard with a rather awesome headline: "The iceberg just rescued the Titanic." Leonard writes,
Like everyone else who makes a living from his words, I'm still in shock. But maybe all of us ink-stained wretches currently catching flies in our gaping maws should just say thank you.
Yes. Thank you, Jeff Bezos. Because there are good reasons to believe that this is not the end of the world for the Washington Post -- and maybe, just maybe, the beginning of a rosier future. Think about it: Jeff Bezos could provide the Post with new stability, he is well-established as someone who doesn't mind losing gobs of money, and, well, he seems to like both books and newspapers.
OK, sure. It's possible this story will have a happy ending -- for its billionaire protagonist, at least. But for everyone else?
Well, just consider another recent Times report by David Streitfeld titled "As Competition Wanes, Amazon Cuts Back Discounts." That's a rather delicate, measured, Times-ian bit of packaging, so I'll turn to the Melville House blog to translate: "Monopoly achieved: An invincible Amazon begins raising prices."
As Melville House's Alex Shephard writes,
Amazon's fifteen year campaign to control the book market -- a campaign that has included not paying taxes, pulling buy buttons of accounts that won't agree to terms, coaching the government to sue its opponents for antitrust violations, and loss-leader pricing so drastic it's questionable the company has ever made a profit -- seems to have finally achieved the monopoly it sought. It's now doing what successful monopolies have, historically, always done upon taking over a marketplace: raising prices. Or at least, that's what a New York Times report by David Streitfeld speculates.
The Washington Post, under Bezos' ownership, obviously isn't going to be able to restore or recreate anything remotely resembling an old-school newspaper-style monopoly. But Shephard's points about Amazon's brutally hyper-competitive (even anti-competitive) tactics during its short lifetime are well taken. (For starters: Watch your back, Politico.)
I understand some of yesterday's euphoria, but I think it won't be long before we see Bezos' Post doing things that are just wonderful for the Post, but terrible for journalism as a business.
Or, to put that another way, never trust an iceberg.
Simon Dumenco is the "Media Guy" columnist for Advertising Age. You can follow him on Twitter @simondumenco.