The rise of the media's new breed Sure, the flight of readers to online competitors hurt America's newspapers, but it was the prostitutes that really crippled them, and this probably takes some explaining. Many newspapers these days have more readers than ever before due to their websites. But only recently have some papers, including The Washington Post, started charging online readers for their news. Though that revenue is a blessed relief, it is nothing like the flood of cash that used to slosh about in the old days. That money used to gush in from the classified pages. But as the internet rose classified advertisers no longer needed papers. In America the website Craigslist let them advertise their jobs or houses or cars for free. And how does Craigslist make a profit? It charges to place the sex ads, and it was worth the prostitute's dime because all the other ads ensure high traffic on the site. Watergate: Carl Bernstein and Bob Woodward at the newsroom. The newspaper division of The Washington Post Company reported operating losses for the past three years, including a $53.7 million loss in 2012. Over those three years daily paid circulation for the Washington Post declined 14 per cent to just over 480,000, while Sunday circulation dropped 11 per cent to just over 697,000. The carnage in the industry has been so extraordinary that many of the nation's great papers have been sold and some resold over the past few years and a new breed of owner has begun to emerge. According to Ken Doctor, an analyst at Outsell, a research and consulting firm for the publishing industry, public companies, with their demand for constant and increasing revenue, are no longer suitable owners for newspapers, and the industry is already returning to the era of family or individual control. The new breed of billionaire owners, Doctor says, have a range of motivations for getting into the business. They are drawn to the cultural cache of owning some of the nation's most significant cultural institutions. They want the political clout that newspapers retain despite their straitened circumstances. Some are so driven, they love the challenge inherent in newspaper publishing. Some believe the industry has been hit so hard that in real estate terms, they may be buying at the bottom of the market. This group notes that major papers that have introduced paywalls have proved many will pay for news and are seeing revenues stabilise. The legendary investor Warren Buffet, who has bought 28 local newspapers for $344 million over recent months falls mostly into the first and last categories, saying in a recent interview: "Charlie and I love newspapers and, if their economics make sense, will buy them even when they fall far short of the size threshold we would require for the purchase of, say, a widget company." It is believed the industrialist Koch brothers, the Tea Party backers circling the Tribune Company, which owns the Chicago Tribune, the Los Angeles Times and The Baltimore Sun, are keen for a political mouthpiece. Which of these motivations is driving Jeff Bezos will decide the future of The Washington Post, and according to most early analysis, there is reason for optimism. Bezos founded Amazon.com in 1994 when he saw the potential of emerging digital technology and a court decision that freed it from state sales tax obligations where they had no physical presence. He has since built it into the largest electronic retailer on earth, amassing a personal fortune of $25 billion, from which he purchased the Post for $250 million. In business he has built a reputation for perfectionism and a fanatical attention to detail, as well as willingness to spend years testing and developing his products. Both attributes could prove crucial to the future of the Post, Doctor says. If Bezos manages to find a new newspaper business model it will take time and patience, and money, but Doctor believes immediate improvements could be made in the way the Post presents and sells its news online, and Bezos is almost uniquely well equipped for that. Amazon's user interface is far better than the average newspaper website and Bezos is meticulous in the way he removes "friction" in the sales process, making it easier for the customer to buy news or other services from the company. In its reporting of the sale, the Post quoted technology analysts who predicted Amazon's advanced predictive analysis of its customers habits could be well suited to creating personalised news feeds for subscribers. Though there is little speculation Bezos plans to use the Post as a political mouthpiece, he does have clear interests in the current political debate. Amazon's business model depends on mining the sea of personal information it collects at a time when privacy is becoming a hot-button issue, and he is known as a libertarian advocate of tax reform and tax cuts. "You might see some of that reflected on the paper's editorial page, but that is the owner's prerogative," Doctor says. In its analysis of the sale, the Post reported its publisher Katharine Weymouth held a grim meeting with the company's chief executive, her uncle, Don Graham, last year. She told him the paper was facing its seventh straight year of losses and the family had three choices: it could continue to preside over the Post's decline; cut even more savagely, effectively swapping quality for longevity; or it could sell to someone who had a chance of rebuilding it, ending four generations of family control. Bezos, already a family friend, sprang to mind as a person who could be trusted to protect the paper's journalistic integrity, who had the drive to try to reimagine the business and the deep pockets to pay a premium price without needing to slash costs for quick returns. Last week similarly positive noises were made about John Henry, the financier and Boston Red Sox owner who has just bought The Boston Globe for $70 million - or, as some put it, with his pocket change. "The Boston Globe could not have found a better buyer than John Henry: He's rich, he's local, he's independent, and he's willing to take risks," a Boston radio website reported. Everyone wanted to 'read all about it' The first call came in at 9am on a Saturday and did not excite Bob Woodward much. A group of men had been caught breaking into the Democratic National Committee headquarters in the Watergate building in downtown D.C. Woodward, who in 1972 had been at The Washington Post for only nine months, told his boss he would check it out. Also on deck that day was a reporter called Carl Bernstein who worked local politics. He started working the phones too. Their work was to become the best-known newspaper investigation in history, bringing down a president and his gang, making the two reporters famous and cementing The Washington Post's reputation as one of the world's great newspapers. Editor Ben Bradlee and publisher Katharine Graham became famous for backing their troops in a long and painstaking investigation of a White House known for its ruthless attacks on "enemies." (As they pursed one Watergate story president Richard Nixon's attorney-general John Mitchell told Bernstein, "Katie Graham's gonna get her tit caught in a big fat wringer if that's published." Mitchell was eventually jailed, while Nixon was pardoned by successor Gerald Ford.) In the years that followed the Post translated its stature into commercial dominance of the Washington D.C. market while maintaining a high profile national coverage. In 1980 the paper was infamously forced to return a Pulitzer Prize won by reporter Janet Cooke for a story called "Jimmy's World," a vivid description of a an eight-year-old heroin addict's life that proved to be fiction. In the lead-up to the 2003 Iraq War the Post suffered a backlash from its liberal readership for its support for the invasion. Its editorial pages featured so many pro-war columns that it sparked a readers' revolt and what the paper called a "torrent of letters" both "angry and anguished." Recently the Post has been struck by the same malaise that has wrought havoc in newspaper publishing around the world: a flight of readers and advertisers to online competitors that are free of the costs of maintaining large expert newsrooms and vast printing and distribution networks. As readership and revenue wilted so did its roster. David Broder, who after 40 years was known as the dean of D.C. pundits, left in 2008, as did Tony Kornheiser, a long-time sports columnist, and Tom Ricks, one of the nation's foremost war reporters. Over five rounds of redundancies a newsroom of 900 was reduced to about 550. Last year metro editor Vernon Loeb had to ask for "more volunteer" reporters to show up for work at the weekend.