Despite media's rapid digital shift, print is still a safe bet in India
Eyebrows were raised when Amazon's Jeff Bezos bought the Washington Post. Editorial staff weren't thrilled. Here was one of America's most venerable newspapers being sold out to a digital shopping site. They thought Bezos would interfere in editorial operations and introduce his own quirky style of management. The Post's storied majesty would be irreparably damaged.
Nothing of the sort happened. Bezos ran the paper at arm's length. He hired rather than retrenched staff, merged the paper's print and digital teams and secured the Post's financial future.
What Amazon can do, Alibaba can do better. The Chinese e-commerce giant announced earlier this month that it was buying the 112-year-old South China Morning Post (SCMP) and all its associated media properties.
Long regarded as the newspaper of choice for Hong Kong's English-speaking elite, the takeover of SCMP by Alibaba has caused much the same concern in the former British colony as Amazon's acquisition of the Washington Post did in the United States.
The worries are more deeply felt though. Alibaba operates within the tightly controlled rules of censorship imposed by Beijing. This is the reason why Google and Twitter are not present in China.
Of course, Hong Kong has the protection of the 50-year agreement signed in 1997 between Britain and China under which the former colony is a specially administered region (SAR) with quasi-independent governance until 2047.
This protection though is already wearing thin. Beijing increasingly remote controls political appointments in Hong Kong. Readers of the South China Morning Post worry that the newspaper will gradually fall hostage to the creeping takeover by China of Hong Kong's freedoms.
Alibaba, sensing the disquiet, has moved quickly to allay such fears. In a letter to readers of the SCMP, Joe Tsai, executive vice-chairman of the Alibaba group, wrote: "The SCMP has iconic status in the region, with a strong reputation internationally for the quality and credibility of its journalism over the years.
Like many print media, however, the SCMP faces challenges amid the dramatic changes in the way news is reported and distributed. But these changes play to Alibaba's strengths, which is why we believe the two companies complement each other well."
Alibaba certainly has the financial resources to weather any storms that blow over print media. Its market valuation is $ 311 billion. And yet, journalists point to Alibaba chairman Jack Ma's track record of cozying up to Beijing. In 2013, a reporter in the South China Morning Post resigned under a cloud.
He had written that Ma supported China's "violent crackdown" on pro-democracy protestors in Tiananmen Square in 1989. Ma denied he had done so or forced the reporter's resignation.
So will Beijing pressurise Alibaba to restrict the Post's editorial independence? Joe Tsai in his letter again tried to dismiss these concerns: "In reporting the news, the SCMP will be objective, accurate and fair…day-to-day editorial decisions will be driven by editors in the newsroom, not in the corporate boardroom."
The larger question, of course, that should engage all media owners, journalists and readers is the rapid global shift from print to digital. Circulations of newspapers in the West are declining. Advertisement revenue is in free fall. Classified advertising, the mainstay of newspapers, has fled to digital sites like Craigslist.
In India, print is relatively insulated by two unique factors. First, literacy levels (currently 74 per cent) are rising and the move to print by a new class of literate readers remains strong. Second, purchasing power is growing, giving print a lease of life. Strong print brands will therefore continue to be read and make a profit.
Nonetheless in India, as in the rest of the word, the shift from print to digital is inexorable. With online advertising rising at over 40 per cent a year, websites are beginning to see the outlines of a sustainable business model.
Firewalled content is working well in the West (a good example is The Times and the Financial Times in Britain and several newspaper titles in the US) but will take time to take root in India where readers still expect digital content to be free.
Amazon's Jeff Bezos and Alibaba's Jack Ma are cut from a very different cloth than old-school media barons like Rupert Murdoch and Katharine Graham, the late former owner of the Washington Post and Newsweek.
But they do have one quality in common: the recognition that content is king. If you dilute the credibility of content, you'll have nothing left. That knowledge is the best protection the Washington Post and the South China Morning Post have.