Vanity Fair's Michael Wolff on the New York Times' corporate strategy

(Update, Saturday, August 26, 2006. Here is the Economist's cover story on the future of newspapers - very interesting discussion of global strategies, winning and losing, for newspapers. The editorial is also quite interesting.)

Michael Wolff has a very, very interesting piece in Vanity Fair discussing the financial, corporate, and strategic business difficulties of the New York Times. Here. (See also Thomas Lifson's piece in The American Thinker, here - thanks RCP.)

The article tries to marry a straight account of the very serious strategic business problems of the Times with a kind of fuzzy-logic conspiracy theory of the Bush administration seeking to take down the Times - which results in a lot of unsupported sentences in the piece along the lines of:

"The calculation in the White House may well be that the Times is one of the few organizations that the weakened Bush people are strong enough to go after."

The joining of a conservative Republican administration with corporate, financial, and Wall Street interests to bring the presumably truth-telling Times to heel is the kind of thing calculated to appeal to the readership of Vanity Fair, but on the sparse actual facts assembled, the two never come together. The truth is surely more prosaic on both the business and political sides, even though this would make a less eye-popping story for Vanity Fair readers wanting to gasp a little at the made-for-TV conspiracy of political and corporate interests that Wolff spins for them.

It's not really that complicated, is it? The Times' investors would like to get a return on their investment. They are stymied by two things. First, there are the long term problems of the traditional print media business model in the internet era. The Times, like every other print media company, has made certain strategic bets. The Washington Post, as Wolff accurately says, has made a bet very different from the Times - to go after the local audience and local market. The Times has made the bet to go national, necessarily sacrificing something local in all that. Neither of those bets was - or is - a priori crazy, even though it certainly does not seem like the Times' is paying off.

The second thing is the cupidity and greed of the controlling B-shares Sulzberger family. On that, Wolff has fascinating and tantalizing interviews off the record with people at and formerly at the Times. But as far as the money goes, it's not political, it's not personal, it's just ROI. Wall Street financiers have no love of Bush or the Republican Party. But these days they have no love for Arthur Sulzberger, either - something to do with his $3 million plus salary and the new corporate headquarters building. Let's not build it into something more than it is.

As far as the Bush administration goes, well, its stance has always been the same, from the get-go. It is not, as Wolff breathlessly asserts, that the Bush administration sees the opportunity to take down the Times. Conservative bloggers would love to do that - indeed, they do it with increasing regularity. The sin, as it were, of the Bush administration is quite different. It doesn't really care what the New York Times thinks. It never has and never will. Its base, apart from the bloggin' crowd, doesn't much care either. The Bush administration doesn't try to use the Times as a scapegoat, because its base doesn't much care about it one way or the other. The New York Times is contemptuous of ordinary Americans and what they think? Believes they should be gently but firmly led in the ways of Higher Truths known best within Manhattan? This is news? The ever increasing shrillness of the Times, whether on the opinion pages or the front page opinion page, has the sound far more of someone hurt by being ignored, rather than attacked.

Yes, it is true that the Times' revelations of the secret intelligence programs raised the profile - but that was because of the objective and concrete damage caused, a genuine issue of national security and law, for which the Times will likely not have to answer - that is the one area on which the conservative base actually cares, not what the Times thinks, but what it does. The two are fundamentally different. Paul Krugman, Maureen Dowd, the whole front page crowd of opinion-meisters - they disturb the sleep of the adminstration's top people, starting with Bush, not one bit. The revelations - not opinion but actions with consequences in the real world of terror and counter-terror - those matter to it and to the conservative base. Yet even on this, the Bush administration is likely to disappoint its base - it is not likely, indeed highly, highly unlikely, that the Justice Department would seek criminal action against the Times, despite the fact that this would please the base enormously and that its legal basis, at least on the signals intelligence issue, is real.

The real issue of the Times is the neither the administration nor the conservative base care anymore what it thinks or opines - and that means more and more as it gets bored with reporting facts and devotes itself to opinion. The Times might contemplate the idea that if it actually just stuck to indisputable, plain facts and skipped the opinionating, it would actually force the administration - and everyone else - to pay more attention. Anyone, starting with this blog, can express opinions, and many bloggers are better at it - better writers - than the professionals at the Times. Facts, however, are much harder to come by, especially those that can't be got easily on the internet, and in the end the most important competitive advantage a newspaper has - the ability to gather news that others cannot easily get. If the Times devoted more attention to that, it might have a product that would force politicians to pay attention - but mere opinion? Since no one doubts that everything is spun, so what?

Mind, I don't think that offering the plain, unvarnished, unopinionated facts is a winning business strategy - a public that loves its own content, the content of itself, produced by itself, the self-consuming consumer - YouTube, for example - is not necessarily going to bother to spend money on facts. But it would make it politically more relevant.

As a sort of independent conservative myself, of course I read the Times every day. But whereas once upon a time I cared what the Times thought if only to think through the argument and why I might happen to agree or disagree with it, either way, nowadays I find it offering arguments less and less, but simply writing memoranda to a certain imagined base of Democratic liberals readers spread out across a kind of abstracted, hypothetical America, simply talking to the converted. Long gone, too, are the days when one could take the facts from a New York Times story at face value - now you have to think about who wrote the story, what interests the Times itself has in the politics of the story, and above all think about what is being left out, not said between the lines. For that matter, in the contemporary New York Times, you can't even automatically trust the photos. It is still a fantastically valuable resource - but one that has to be read with all sorts of fact-checking, tendentiousness-checking, unstated motivations-checking programs running in one's head. And it gets shriller, and shriller, and shriller.

So, no, I don't think Wolff has represented the political dynamics between the Bush administration and the Times accurately at all. He suggests that the administration pays attention to the Times for more than simply what aspect of national security the newspaper, in its sole wisdom and discretion as to the public interest, has decided to compromise that week. That does not mean caring what the Times thinks, only what (bad) things it does and some attention to whether it has finally crossed the line at which prosecution is unavoidable. And the idea that Bush administration politics are intertwined with the marketplace in some loose conspiracy - well, that's just loopy leftiness intertwined with selling copies of Vanity Fair.

That leaves the deep problem of how to sell newspapers in the internet age. And no one seems to have the answer to that. My primary pro bono activity, unrelated to this blog, is as chair of the board of a nonprofit media assistance organization - a kind of nonprofit private equity firm that makes investments in media businesses in the developing world to help them achieve financial independence and, therefore, editorial independence. It's an amazingly successful organization, with a portfolio of some $50 million in media investments everywhere from Indonesia to Russia. So I spend quite a lot of time reading, thinking, and talking about media business strategies, particularly for newspapers that are committed to serious news - I don't pretend to be an expert the way that our organization's staff are experts. But one thing we regularly discuss is the condition of newspapers in the US and elsewhere in the industrialized, post industrialized world where the internet is default mode. And frequently those discussions conclude by saying - gosh, it's pretty darn hard to come up with a winning business strategy for a newspaper in a poor country with high unemployment, illiteracy, low incomes, few advertisers, etc. - but it's also pretty darn hard to come up with a winning business strategy for newspaper in a post industrialized, internet-heavy country, too.