by Gary Schwartz (06/08/2013)
The newspaper business is tough. Over the weekend the New York Times Company sold The Boston Globe and its other New England media properties to John W. Henry, principal owner of the Boston Red Sox for $70MM. It bought the asset in 1993 for 1.1BB.
When Jeff Bezos, the CEO of Amazon, agreed to purchase the Washington Post newspaper (affectionately called WaPo by its readers) for $250m, was he buying a viable business or and the glory of 80 years of traditional media leadership.
With a net value of 20BB, Jeff Bezos can buy many things. Does he see this as an extension of his internet empire or as a way this new-age business genius can secure an old-world trophy and a media legacy?
Amazon Publishing, Amazon Studios . . . but this is different
Bezos has taken on incumbent media business before. He has single-handedly changed the publishing world. Amazon Crossing, Amazon Publishing’s imprint acquired Pötzsch’s Hangman’s Daughter series and translated it from German into English and launched it in audio and print. The series became a #1 bestselling Kindle book and in June 2013, the book reached the platinum one million copies sold.
Amazon Studios is now developing movies and TV series, and recently announced five new video-on-demand program pilots. It has started a crowd sourcing campaign soliciting 2-15 minute long shorts to pitch a feature-length film idea. Amazon Studios evaluates each submission, and will seed some of the submissions with $10,000. The studio then grooms the development funding successful scripts through to the theatrical release incentivizing film makers that get their ideas from paper to the silver screen $400,000.
But the Washington Post is different. He did not purchase the Post’s other online assets: Slate magazine, TheRoot.com, and Foreign Policy. The flagship Washington Post newspaper purchase seems more of a personal acquisition and less a vertical strategy. Bezos will become an owner taking over the Graham family title. Does Bezos what some old-world legacy to place on his media mantel?
Post chief executive, Donald Graham has known Bezos for about 15 years which most likely helped this transition easier. He told FT.com that “He [Bezo] is a very patient, long-term investor.” He will need to be. Despite the paper’s move into digital publishing, the Washington Post has seen a decline in circulation (6.5% in the last year alone) and the trick down pain of declining advertising sales.
What Bezos is buying is the paper’s white-glove media position only rivaled by The New York Times. The paper hold its place as the seventh most popular daily newspaper in the US. Many in the industry is watching closely and hoping Bezos can bring his magic to the ailing publishing business.
Journalist Carl Bernstein who broke the Watergate story with the Post, told Politico that this change of power is “recognition that a new kind of entrepreneurship and leadership, fashioned in the age of the new technology, is needed to lead not just The Post, but perhaps the news business itself”. Bernstein’s partner and Post associate editor Bob Woodward, said on MSNBC. “I think in some ways, this may be the Post’s last chance to survive, at least in some form of what it was.”
So with the world watching what will Bezos do? Will he launch 3D printing with this property? Will he connect one-click commerce to this new newspaper install base? Maybe he will simply use this blue-chip Washington company as entree to the DC Beltway and all the value of being a Washington insider.
While Bezos will surely add innovation to the paper, he will be careful not to vanquish Katharine Graham’s family-run papers legacy and maybe happy to simply keep the association with grit journalism at its best.