Bezos Buys the Washington Post: A brave new world for newspapers

October 9, 2013

by Evette Alexander

Serial innovator Jeff Bezos is known for reinventing industries around customer needs, pioneering such concepts as online retail and tablet readers. Now, his curious purchase of the Washington Post has the world wondering if, how and to what end he will transform the daily news

Extra, Extra!

On August 5th, Washington Post staff gathered to hear shocking headlines from owner Donald Graham. He had sold the paper that had been in his family for 80 years to Amazon founder Jeff Bezos for $250 million

Graham wrote that he arrived at the decision to sell after seven years of declining revenues in a troubled industry that raised “questions to which we have no answers.” According to Bercovici writing in Forbes attempts at online innovation failed to compensate for the mass diversion of advertising revenues to Internet giants, of which Amazon alone captured $610 million last year (Bercovici, 2013). With Bezos, he sees a chance for the company to succeed.

In a letter to employees, Jeff Bezos was quick to reassure that the company’s core values “do not need changing;” however, the business must and will change. He communicated a vague desire to “invent” and “experiment” in order to understand and provide what readers want – leaving everyone to guess what that could mean.

Old media savior or category killer?

Without a clear road map, some cast Bezos as an “old media savior”, a philanthropist who bought the paper as a public service to “re-invest in the infrastructure of our public intelligence” Bob Woodward, (of the infamous Post duo that broke Watergate) envisions Bezos using his “deep pockets” to “hyper invest” in investigative journalism However, Bezos – not his family trust – bought the paper.

Others fear him as the Fourth Horsemen of the Apocalypse. The “category killer” often accredited with single handedly destroying the traditional book industry now has his sights on news print. Will he retire the presses to cut costs and drive content to Kindle?

Bezos once indicated a key “problem” for newspapers was offering print and digital at the same time, suggesting print would be obsolete within 20 years . Bezos may also see his “duty to readers” differently than journalists). What if the all-powerful reader prefers celebrity boob job stories over political coverage? How far change could extend when faced with a tradeoff between market share and the values he pledged to uphold?

A friend in Washington (DC)

Bezos is quick to remind us of his “day job,” lest we forget his primary interest is Amazon. Would he use the paper’s influence to protect his brainchild in a political battle? The Washington Post still has a powerful voice in the capital where politicians are starting to turn a sheriff’s eye to online quasi-monopolies like Google, Apple iTunes and Facebook. Although Bezos lobbies for Amazon’s regulatory interests in Washington, the Post is not to serve owner interests But, as one of its former editors points out, “mixing commerce and journalism is always fraught with its own perils on the ethics side” [Hagey, K. and G. Bensinger (2013) “For Bezos: A new puzzle,” The Wall Street Journal. 7 August 2013]

Experienced trailblazer meets new frontier

The Post paints a rosy future for itself under Bezos, expecting he will “marry quality journalism with commercial success in the digital era.” Bezos’ track record is impressive to be sure. He started Amazon.com in his garage in 1995, which now includes devices, cloud computing, and is emerging as an online media platform. He successfully replicated the online retail model across Europe, Asia and South America. If the Post’s new model proves successful, we may see him do the same abroad.

Clues into Bezos’ strategic philosophies lie in his annual letter to Amazon shareholders. He remains focused on creating long-term value over short term returns, so we should see him making significant upfront investments and enduring low revenue streams for future payoffs He will seek actively to delight customers by over-delivering, lowering prices and anticipating their needs before competition demands it (Amazon.com, 2013). He sees failure as necessary for invention, yet is demanding and attentive to detail. He pushes for innovation, with a regular reminder that “it’s still Day 1” for the Internet.

Perhaps now, it’s Day 1 for the newspaper.

The author

Evette Treewater Alexander is Manager of Strategy & Market Intelligence at ADT, the leading provider of home security and automation services in North America. She is pursuing a Global MBA at the Manchester Business School and looks forward to her next workshop in Sao Paulo, Brazil, where she previously lived and worked as a strategic marketing consultant. The blog post was developed from an assignment she carried out for the Global Events & Leadership course.


Self Publishing. The Future for Would Be Book Writers?

January 4, 2013

First Kindle and now the iPad have revived the dream of self publishing. How realistic is it for would-be authors?

A friend confided in me recently that he was thinking of writing a series of books. He was planning his departure from a high pressure job which has accustomed him to long hours. Leisurely retirement was out of the question.

This guy is no fantasist

I politely heard him out. Then he told me he was taking professional advice and coaching in creative writing. This guy is no fantasist. He may well go down the traditional route of dead tree publishing. There again, he might consider self publishing.

An instructive experiment

One published author recently carried out a test, in which he tried both traditional and tablet variants of publishing simultaneously. OK, methodologically he needed to have found a way of publishing the same book simultaneously and testing for various factors such as price. But the experiment was instructive.

The blog post by David Gauntlett outlines a method of pricing e-books, based on the price of lattes.

Digital transformations – cutting out the middle people – are creeping across the face of academic life… So, I put together a collection of previously-published pieces, revised and with some new material, as a Kindle book. I called it Media Studies 2.0, and Other Battles around the Future of Media Research, and put it on sale for £3.80. (Friends had suggested that I shouldn’t make it too cheap, as that would undermine people’s respect for it. Therefore I settled on £3.80 as a price which I thought sounded somehow quite authoritative whilst still being highly affordable).

I publicised the book via my website and Twitter. On one occasion I noted in a promotional tweet that it was ‘cheaper than two lattes’ (16 September 2011), which seemed like a reasonable way of looking at it.
In the same summer I also had a ‘proper’ book out, Making is Connecting, published by Polity. And for some commercial or bureaucratic reason, Polity have so far failed to come to an agreement with Amazon to make their books available on Kindle. Therefore we arrived at a ‘natural experiment’ where circumstances had conspired to have a Kindle book by me, and a wholly paper-based book by me, newly out at the same time, so that we could compare their fates.

What happened next?

The book published by traditional method is currently outselling the Kindle one. The author lists the methodological weaknesses in his trial. Nevertheless I find this a valuable starting point to consider the future of e-publishing for the pioneering author.

Health warning

Writing is a compulsion that can strike at any time. If you find this blog interesting, check for the tell-tale symptoms of the Midnight Disease [I am writing this at roughly 4 am ].

To go more deeply

The LSE also published earlier interesting reports on e-publishing that are worth following up.

Another experiment

In the interests of market research, I have produced two posts on this topic which provide roughly the same information, but dressed up in different formats and with different titles. They have been tagged identically, and have been published on the same day. [ I have avoided adding media images as these might influence hits.] I will be watching with interest to see over time whether one post attracts more visits, visitors, and ‘likes’, than the other.


Would you buy a book for the price of two lattes?

January 4, 2013

e-Publishing is developing apace. One advocate has established a marketing model based on the exchange price of the cost of a high street coffee

The pricing story was told in a blog published from the venerable London School of Economics or LSE [not to be confused with the London Stock Exchange, also known as the LSE].

The blog post by David Gauntlett describes his experiment and suggests a method of pricing e-books, based on the price of lattes.

Until the mid 1990s, people booked holidays via a travel agent, which seemed normal and fine. Since then, the role of ‘travel agent’ has come to seem weird – why would we want to give an extra slice of money to someone for doing a task which we can easily do for ourselves online?

Similarly, if you needed to sell things that you owned but didn’t want any more, you would naturally have to consult a second hand shopkeeper – and probably get ripped off by them; until we reached the point where you would obviously just do it yourself on eBay.

These kinds of digital transformations – cutting out the middle people – are creeping across the face of academic life, but more slowly than you might expect.
So, I put together a collection of previously-published pieces, revised and with some new material, as a Kindle book. I called it Media Studies 2.0, and Other Battles around the Future of Media Research, and put it on sale for £3.80. (Friends had suggested that I shouldn’t make it too cheap, as that would undermine people’s respect for it. Therefore I settled on £3.80 as a price which I thought sounded somehow quite authoritative whilst still being highly affordable).

I publicised the book via my website and Twitter. On one occasion I noted in a promotional tweet that it was ‘cheaper than two lattes’ (16 September 2011), which seemed like a reasonable way of looking at it.
In the same summer I also had a ‘proper’ book out, Making is Connecting, published by Polity. And for some commercial or bureaucratic reason, Polity have so far failed to come to an agreement with Amazon to make their books available on Kindle. Therefore we arrived at a ‘natural experiment’ where circumstances had conspired to have a Kindle book by me, and a wholly paper-based book by me, newly out at the same time, so that we could compare their fates.

What happened next?

The book published by the traditional method is currently outselling the Kindle one. The author lists the methodological weaknesses in his trial. Nevertheless I find this a valuable starting point to consider the future of e-publishing for the pioneering author

Health warning

Writing is a compulsion that can strike at any time. If you find this blog interesting, check for the tell-tale symptoms of the Midnight Disease [I am writing this at roughly 4 am ].

To go more deeply

The LSE also published earlier reports on e-publishing that are worth following up.

Another experiment

In the interests of market research, I have produced two posts on this topic which provide roughly the same information, but dressed up in different formats and with different titles. They have been tagged identically, and have been published on the same day. [I have avoided adding media images as these might influence hits.] I will be watching with interest to see over time whether one post attracts more visits, visitors, and ‘likes’, than the other.