In the last week, we have seen 2 major newspaper companies, The Boston Globe and The Washington Post, acquired by wealthy business people. John Henry in the case of the Boston Globe and Jeff Bezos with The Washington Post.
The revenue declines, struggles to retain readers, and high cost structure of the print newspaper business have been well documented and I won’t go into them here. But in trying to turn around these businesses, there are not obvious examples to follow, so it’s a bit of a Brave New World.
Can these owners make money in the news business (I won’t call them “newspapers” anymore) with original news content, through a digital-only or “digital primary” business model? What areas of news or content will they try to dominate? How important is the brand? The Post has an incredible brand in politics, The Boston Globe does in local sports and local news, but there are so many more competing options for Globe readers these days.
Where will the revenue come from? Not from classifieds, not anymore, not even online. What Monster and Autotrader did to newspaper print classifieds, Indeed and Craigslist did to Monster and the online classified business. That toothpaste is out of the tube…
It would seem as though there should be revenue available through local search and buying intent, helping local small businesses reach large swaths of local consumers. News companies still have large groups of local consumers reaching their online properties, but they monetize this audience through banner advertising that is not targeted and has very low CPM.
One thing Bezos knows is personalization, and that is good for news companies because they do such a poor job of it today. As a fairly regular Boston.com reader, I get lots of banners and they are pretty generic. I almost never notice or click them.
Bezos is an amazing innovator. But how much of that can he push as an owner rather then CEO?
News organizations should be able to make this equation work- Local business relationships + local info + deep personalization = local commerce That business model agenda would help The Post, but not Amazon, since it competes with local merchants. So we’ll see how Bezos’ manages this conflict, or even if he views it as one.
With John Henry, he has proven to wring extra revenue out of the RedSox so we can expect he’ll try to do the same with the Globe. But owning the team, a cable channel and the major news company is a conflict in it’s own right. Maybe the play is with advertisers, to give them multiple channels. It will be interesting to see how the Globe and the Red Sox co-exist and also how NESN factors in.
Of course, all of this could simply be a case of noblesse oblige regarding these news institutions.