A lot has been written about how the internet undermined and destroyed media. What we are seeing today may be the more important story, however, which is the tech industry is explicitly buying out the media, particular culture making elite media institutions.
This was illustrated again when it was recently announced that Salesforce CEO Mark Benioff is buying Time magazine for $190 million. Jeff Bezos already owns the Washington Post. Steve Job’s widow owns the Atlantic. These are all people who have essentially infinite funds to sustain these over the long term – as vanity projects if necessary. How many high status print publications are left to acquire? The New Yorker is owned by Condé Nast, which reportedly hemorrhages money, though is owned by a very wealthy family. The WSJ is already in corporate hands, so should be buyable at some point. The NYT is still family controlled for the time being. Broadcast media is tougher but might ultimately share the same fate. (Foreign elite media is a different story than the US).
This represents a wholesale shift of cultural power from New York/Washington to San Francisco/Seattle. I don’t think the media class full understands what is happening because they live in a world that thinks very differently from Silicon Valley.
Paul Graham’s essay Cities and Ambition talks about the difference between San Francisco and New York’s ambitions, and how they ultimately work to the detriment of New York.
When you ask what message a city sends, you sometimes get surprising answers. As much as they respect brains in Silicon Valley, the message the Valley sends is: you should be more powerful.
That’s not quite the same message New York sends. Power matters in New York too of course, but New York is pretty impressed by a billion dollars even if you merely inherited it. In Silicon Valley no one would care except a few real estate agents. What matters in Silicon Valley is how much effect you have on the world. The reason people there care about Larry and Sergey is not their wealth but the fact that they control Google, which affects practically everyone.
In the long term, that could be a bad thing for New York. The power of an important new technology does eventually convert to money. So by caring more about money and less about power than Silicon Valley, New York is recognizing the same thing, but slower. And in fact it has been losing to Silicon Valley at its own game: the ratio of New York to California residents in the Forbes 400 has decreased from 1.45 (81:56) when the list was first published in 1982 to .83 (73:88) in 2007.
Tech people are not interested in the social prestige of owning fancy publications. They care about power. It seems very likely that the media class will discover this to their chagrin sometime in the future. After the debacle of the New Republic, the tech titans are treading gently. Note how Benioff stresses that he is going to be a hand’s off owner:
I’m not going to get involved operationally. We don’t get operationally involved in our investments. I’m busy enough with my job. They have a great team. It’s a very strong business. Very profitable.
Don’t you believe it. If journalists think that technology people respect all the customs of their industry, such as editorial independence, they are sadly mistaken. At some point, the ownership of these properties will assert themselves. Think they are going to let the very media outlets they own indefinitely agitate for government investigations and regulations of the tech industry? Or do in depth investigative reporting of themselves? The tech people understand full well the true value of what they are buying.
It will be interesting to see how this plays out. Over time the number of big name, financially secure media people will decline as they cycle out into retirement. Once that hits a critical point, and they have reshaped their mastheads into a much more dependent and thus compliant class, we’ll see what these tech owners end up doing.