By now you’ve heard that the iconic Washington Post, the newspaper that toppled Richard Nixon from the presidency in 1974, was sold at a pittance (relative to what it would have been 15 years ago) to the very wealthy and very capable founder of Amazon, Jeff Bezos. I can’t tell you what will happen, but I can give you some food for thought.
- This is not the first time Bezos has made big personal investments. He bought huge pieces of Pets.com and Kozmo.com. Both of those went bankrupt.
- The Post, according to Don Graham, has suffered declining revenue seven years running. In the first quarter of this year, the paper lost $34 million from operations.
- Bezos paid $250 million in cash to buy the paper. As a percentage of his personal net worth, that’s equivalent to the median American family paying $2,000 for a car. It’s a very manageable amount of money for him. If the paper runs losses for a long time, he can keep re-upping.
- At the current subscription price of roughly $180/yr, Bezos needs another 750,000 subscribers to break even.
Why should anyone subscribe?
What can a subscriber to the Washington Post get that they can’t get anywhere else?
Warren Buffett has taken an interest in local newspapers as the only source of local information. He said (p. 17):A reader’s eyes may glaze over after they take in a couple of paragraphs about Canadian tariffs or political developments in Pakistan; a story about the reader himself or his neighbors will be read to the end.
That’s one of two directions I think Bezos and the Post will settle on. The Washington Post can still be the source for local news in DC.
Can it maintain national readership?
I think so. Bezos said he’s going to pay close attention to what readers want: “Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there.” Just look at how much of that is local, how little of that is Watergate-esque!
But if he can afford to wait a while and to keep really good government journalism going at the Post, he may be able to bankroll a level of government journalism above anything being done by anyone else. That would be a differentiator, and with a subscription model for digital or Amazon’s distribution system for print, that might be a story worth paying for.
Do you agree? Let me know in the comments below, or share this food for thought with a friend.