Mutter: Digital doctor Bezos takes on ailing Post

Posted on | August 6, 2013 | 1 Comment

Reflec­tions of a Newsosaur

 MUSINGS (AND OCCASIONAL URGENT WARNINGS) OF A VETERAN MEDIA EXECUTIVE, WHO FEARS OUR NEWS-GATHERING COMPANIES ARE STUMBLING TO EXTINCTION

By Alan D. Mut­ter, Mon­day, August 5, 2013

The pur­chase of the strug­gling Wash­ing­ton Post by Jeff Bezos may be the best news the news indus­try has had in a long time, because it finally puts a true dig­i­tal native at the helm of a news­pa­per company.

Bezos, the bil­lion­aire founder of Amazon.Com, is uniquely equipped to bring unprece­dented inno­va­tion and fresh energy to an indus­try whose man­agers run their busi­nesses like the peo­ple of Cuba treat their 1953 Ply­mouths: tin­ker­ing with them just enough to keep running.

While the peo­ple in Cuba unfor­tu­nately have no other options, the news­pa­per indus­try has been sput­ter­ing toward irrel­e­vance for the bet­ter part of a decade because edi­tors and pub­lish­ers either don’t like or don’t get dig­i­tal pub­lish­ing. Per­haps, it’s a bit of both.

Either way, Bezos, who is pay­ing $250 mil­lion of his own money to buy the news­pa­per from the heirs of the man who pur­chased it out bank­ruptcy in 1933, now has the oppor­tu­nity to show pub­lish­ers how to do dig­i­tal. And it’s a safe bet he will grab it.

With a per­sonal for­tune top­ping $25 bil­lion, Bezos has the demon­strated means, insight and patience to re-envision the busi­ness model of an indus­try that has lost more than half of its pri­mary rev­enue stream since adver­tis­ing sales peaked at $49.4 bil­lion in 2005.

Bezos has his work cut out for him.  The Post’s rev­enues have declined from $957.1 mil­lion in 2005 to $581.7 mil­lion in 2012. Its oper­at­ing prof­its have plunged from $125.4 mil­lion in 2005 to a loss of $53.7 mil­lion in 2012. Daily cir­cu­la­tion dropped from 706,135 in 2005 to 471,800 in 2012. Sun­day cir­cu­la­tion slid from 983,243 in 2005 to 687,200 in 2012.

Unlike the edi­tors and pub­lish­ers who are hope­lessly hooked on the romance of thun­der­ing presses (and they are won­der­ful to behold), Bezos undoubt­edly views the Post as an iconic but under­uti­lized brand that can tran­scend the tem­po­ral and geo­graphic lim­i­ta­tions of print to become a big­ger brand than it is today in the whole, wide dig­i­tal world – spe­cial­iz­ing, pre­sum­ably, in gov­ern­ment, pol­i­tics and other capital-centric content.

Though Bezos prob­a­bly has no inten­tion of silenc­ing the presses any time soon, his suc­cess in build­ing Ama­zon from a garage start-up to a $136 bil­lion behe­moth sug­gests that he is intel­lec­tu­ally, emo­tion­ally and finan­cially lib­er­ated from the obei­sance to print that con­strains the think­ing of tra­di­tional news­pa­per executives.

As such, Bezos will be free to lever­age his intu­ition, expe­ri­ence and con­tacts in the dig­i­tal uni­verse to launch new prod­ucts, build new audi­ences and cre­ate new rev­enue oppor­tu­ni­ties on desk­tops, smart­phones, lap­tops, smart TVs, Google Glass, iWatches and what­ever comes next.

As a pio­neer in per­son­al­iz­ing prod­uct offer­ings based on con­sumer behav­ior and pref­er­ences, Bezos knows far more about data mar­ket­ing and ana­lyt­ics than any­one else in the news­pa­per – or, for that mat­ter, any other – busi­ness. He’s almost cer­tain to dis­cuss this with folks at the Post.

Bezos also pos­sesses bold­ness and self-assurance that are rare among even many Inter­net entre­pre­neurs. Unlike the chief exec­u­tives of most pub­licly held com­pa­nies, Bezos has shown excep­tional patience over the years in sup­port­ing ini­tially unprof­itable busi­ness ini­tia­tives that he deemed to be strate­gi­cally nec­es­sary to his goal of build­ing the pre­em­i­nent eCom­merce business.

With Ama­zon com­fort­ably dom­i­nat­ing dig­i­tal com­merce, Bezos set out to become a major force in media deliv­ery by cre­at­ing Kin­dle read­ers and the Ama­zon Prime entertainment-streaming service.

In using his own money to buy the Post, Bezos is shield­ing him­self from the scrutiny (and poten­tial wrath) of Ama­zon share­hold­ers who might not be as patient about the time and expense of a Post turn­around as Bezos might be.  But the share­hold­ers nonethe­less could reap ben­e­fits from the relationship.

While there is no way of know­ing exactly what Bezos might do, the acqui­si­tion of the Post could be a major enhance­ment to Amazon’s media-delivery busi­ness. For instance:

∷ Why couldn’t every Kin­dle in the future be shipped with a free trial sub­scrip­tion to the Wash­ing­ton Post?

∷ Why couldn’t all past and present Post videos be fea­tured in a promi­nent posi­tion on the Ama­zon Prime wel­come screen?

Read more at Reflec­tions of a New­sosaur.

______________

Alan D. Mut­ter is per­haps the only CEO in Sil­i­con Val­ley who knows how to set type one let­ter at a time. Mut­ter began his career as a news­pa­per colum­nist and edi­tor at the Chicago Daily News and later rose to City Edi­tor of the Chicago Sun-Times. In 1984, he became No. 2 edi­tor of the San Fran­cisco Chron­i­cle. He left the news­pa­per busi­ness in 1988 to join Inter­Me­dia Part­ners, a start-up that became one of the largest cable-TV com­pa­nies in the U.S. Mut­ter was the COO of Inter­Me­dia when he moved to Sil­i­con Val­ley in 1996 to join the first of the three start-up com­pa­nies he led as CEO. The com­pa­nies he headed were a pio­neer­ing Inter­net ser­vice provider and two enterprise-software com­pa­nies. Mut­ter now is a con­sul­tant spe­cial­iz­ing in cor­po­rate ini­tia­tives and new media ven­tures involv­ing jour­nal­ism and tech­nol­ogy. He ordi­nar­ily does not write about clients or sub­jects that will affect their inter­ests. In the rare event he does, this will be fully dis­closed. Mut­ter also is on the adjunct fac­ulty of the Grad­u­ate School of Jour­nal­ism at the Uni­ver­sity of Cal­i­for­nia at Berkeley.

 

Comments

One Response to “Mutter: Digital doctor Bezos takes on ailing Post”

  1. Click Homepage
    August 15th, 2013 @ 7:09 AM

    The con­sumer at present makes the deci­sion what­ever it prefers for amuse­ment, def­i­nitely not the main stu­dios and rep­re­sen­ta­tives. If you hap­pen to add to that dis­tri­b­u­tion on the web and, news reports, web­sites online, from rumor to entire movies. It’s actu­ally a brand new world. Much of it won­der­ful, some not.

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