Under Jeff Bezos, Washington Post poised to become incubator for media innovation

Under Jeff Bezos, Washington Post poised to become incubator for media innovation

Diane Francis | 13/08/24 | Last Updated: 13/08/23 2:50 PM ET
There is speculation as to what Amazon founder Jeff Bezos is going to do with his latest acquisition, the venerable Washington Post.

Bezos’s e-book success provides blueprint for newspaper overhaul

Jeff Bezos has already transformed one traditional print business — books — into a digital one. The experience provides a blueprint for how the billionaire technology executive is now poised to overhaul newspapers following his US$250 million acquisition of the Washington Post. But it’s really not difficult to discern. Bezos is going to do to the media (newspapers, magazines and television) what Amazon did to bookstores and authors. One need only consider his mission statement for Amazon, the book business he began in 1994: “Our vision is to have every book ever printed, in any language, available in under 60 seconds.”The Amazon template adapted to the media would be able to have every article and broadcast and documentaries, in any language, available in less than 60 seconds.

Bezos will provide consumers with content from anywhere anytime, quickly. HisWashington Post site will eventually contain Amazon elements: easy payment in fractions of cents; immediate delivery electronically with an option to re-route delivery; availability of subscriptions; software that enables buyers to know about and buy related content as well as find out what fellow buyers have bought; and interactivity such as posting reviews or comments. His Washington Post, like Amazon, will offer an ongoing relationship to consumers in the form of emailed alerts, reminders or bargains.

And there will be much more.

Sellers of content, also customers of Amazon and the Washington Post, will be able to sell related content or merchandise. They will be able to reach a global market. For instance, an article by a sports writer about a sports figure will yield, if requested, a menu of the writer’s other articles or appearances and a menu of other articles about the sports figure complete with an opportunity to buy tee shirts, bubble-heads, souvenirs, memorabilia, sweat suits and tickets to upcoming events.

While the outcome is fairly obvious, the question is why did Bezos pay $250-million (he paid $500 million but $250 was for its real estate) for the Washington Post? Why didn’t he just start offering content deals to publishers and journalists then sell it on Amazon as he does now with movies?

He needs the Washington Post brand name to front an Amazon-type service to attract discriminating consumers as well as to recruit the world’s other media owners to sell through his site.

This will take time, as Amazon did, but as customers enjoy the ease and variety of information gathering, the world’s media and journalists or broadcasters will be clamoring to sell their stuff through a newly constituted Washington Post.

This sounds frightening to some. After all, the Amazon technology has certainly ruined the bookstore business and pushed around publishers. But the facts tell a different story.

There may be fewer bookstores and book publishers but more books are being bought, thanks to Amazon. This is because of price and convenience. Books can be bought in e-format, new, on sale or used anywhere, anytime.

This has provided authors with more options. Through Amazon, an author can sell books globally without getting a global publisher or without incurring enormous inventory or other expenses. Authors can self-publish, in partnership with Amazon. This, in turn, provides an outlet for more ideas and stories than ever. Writers are no longer restricted and can write about the most arcane, academic, simple or erotic topics they want.

(And, by the way, they can also flog tee shirts or bubbleheads or their previous books and blogs at the same time.)

In essence, I believe Bezos will turn the Washington Post into the world’s first virtual media provider, just as Amazon has become the world’s virtual bookstore and retail outlet in general.

Theoretically, the media industry will continue for years to provide content to their audiences first. But Bezos will allow publishers and content providers to amplify their audiences, impact and revenues, by selling it to Bezos’ Washington Post.

New opportunities will open up for individual journalists, broadcasters and bloggers as has happened to authors. Authors of books can publish with Amazon in return for as much as 70% of the revenue generated.

My guess is that Bezos will keep his new media entity, the WashPost, freestanding and not fold it into Amazon even though Amazon is already in the book publishing and video content business.

The trick will be to digitize the media for money while retaining its brand influence. If anybody can, he can. He’s worth US$25-billion after launching Amazon in 1994. This year’s worldwide revenues will exceed US$60-billion.

Bezos won’t destroy the media. He will leave players behind but the status quo hasn’t been an option for decades.

Television and radio with their immediacy undermined “news” and turned to reporting of weather, traffic and spot news events such as elections and baseball games.

In the 1980s, satellite printing, or the ability of content to be transmitted simultaneously for distribution elsewhere, undermined the hegemony and monopolies enjoyed by local newspapers.

Now the Internet has stripped away the content that sold most of the ads — business, sports, advice, real estate, gossip, consumerism and travel. It’s stripped away the ads themselves — classified and display ads are now online. And the Internet has also carved away portions of the newspaper that weren’t big advertising generators: the editorials, columnists and letters to the editor.

This is what happened to the grand old Washington Post too because it did not respond properly. (For instance, one of the spinoffs from its newsroom became Politico which now has as many readers as the newspaper itself.)

To technologize content is one thing but to technologize the Fourth Estate is another. I sincerely hope this is why he bought one of the greatest and most influential brands in the world. This is uber-content, curated and influential, that can and should command a premium in the marketplace.

Under his ownership, the Washington Post will become the incubator for all media innovations. This is why its evolution, like that of the book business, may be more positive than negative.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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