Thursday, December 22, 2016

Honeymoon at the Washington Post: what's next?

Executive Editor Marty Baron interviews Post owner Jeff Bezos. (Washington Post photo)

Note: Marty Baron will be speaking here at the University of Navarra in Pamplona, Spain, on Jan. 26.

The Washington Post is following the strategy of world domination of its owner, Jeff Bezos, the founder and CEO of Amazon, the world's largest online retailer.

In contrast with most of the newspapers in the U.S. and Europe, the Washington Post is hiring journalists and engineers, investing in new technology, and expanding into new markets. Bezos has  global ambitions for the Post, as Newsweek detailed in a recent analysis. 

In the same way that he built the business of Amazon, Bezos has committed to absorbing financial losses in the short term with an eye toward gaining market share over the long term. It's a strategy that requires an owner with deep pockets.  

Versión en español

The perfect marriage?

That's the business side. The good news for the journalists at the Post is that both their prize-winning executive editor, Marty Baron, and Bezos both believe in the importance of producing high-quality journalism that serves the needs and wants of the paper's community. 

Bezos believes deeply in focusing on creating an excellent experience for the user. The Wall Street Journal recounted how Bezos responded to a Post reader's complaint that the web pages loaded too slowly. He sent an email to a digital editor, pushing him to get pages loading much faster, especially on mobiles, which represent 70% of the Post's traffic.  

At an event sponsored by the newspaper, Bezos said that his goal was to transform the Washington Post from "a great local paper into a great national and global paper." 

More readers paying less

To achieve that goal, the business model has to change. "We've historically made a relatively large amount of money per reader on a relatively small number of readers," Bezos said. "We need instead to make a relatively small amount of money per reader on a much larger number of readers."

As part of the new strategy, the Post is sharing its contents on as many platforms as possible, from the Instant Articles of Facebook, where it is publishing all its contents, to Twitter, LinkedIn, Snapchat, Pinterest, Tumblr, Google+ and Instagram. 

Emilio García-Ruiz, the Post's managing editor for digitalexplained the strategy in a speech at a journalism conference in Spain. The idea is to get as many people as possible to sample your product (in journalism, it's through sharing in social networks), get them to pay for a product, and then make them repeat buyers for higher-value products. At each stage the pool of customers is smaller but spending more.

The key in a business sense, said Garcia-Ruiz, is to keep expanding that pool at the top of the funnel, just as Amazon has done in retail. And from a journalism perspective, the key is to merge the best journalism with the best technology to keep people coming back for more.

Target: New York Times

The results to date have been impressive, if you use traditional web metrics. The Post surpassed the New York Times in unique users for the first time from October through December of 2015 before the Times recovered its dominance. (Ken Doctor has made a detailed comparison of the digital metrics of the two dailies.)

The question is whether this has translated into business results. Because the Post is a private company, it does not publish its financials. A marketing executive from the paper told Digiday that digital subscriptions grew 145% in one year but did not give specific financial results. 

Hire, not fire

The conversion of the Post into a primarily digital publication is being pushed by Bezos and Baron with a sense of urgency. The nation's largest daily newspapers have been losing print subscribers at a steepening rate, according to an analysis by the editor of ProPublica.

At the same time, the nation's dailies have slashed 20,000 journalists from their payrolls -- more than a third -- in the past 20 years. By contrast, the Post, since the arrival of Bezos, wrote Dan Kennedy, has added 100 journalists, for a total of 700, and added 35 engineers. This is one of the advantages of being a private company that does not have to respond to Wall Street's demands for profits and dividends. 

In a town hall meeting with the Post's journalists, as reported by Joseph Lichterman of NiemanLab, Bezos explained that his goal is to use technology to know the readers better and use that information to better serve them. "To be the paper of record we need talent, money and patience, and we have all three," he told them. Generally, the reactions of the journalists were positive. 

The future is digital

In various forums and interviews (such as this one, published on Yahoo Finance), Baron has praised Bezos for his vision and his respect of the independence of the paper's newsroom. Baron speaks with Bezos for an hour by telephone every two weeks, and the top editors travel to Amazon's headquarters in Seattle for a meeting every six months.

While Bezos doesn't interfere in newsroom decisions, he does push his editors to find ways to get readers to click on and read the paper's in-depth investigations. As a result, Baron has changed some of the tactics for producing and distributing the editorial content. 

At the moment, this looks like a honeymoon relationship: a billionaire rescues a floundering  newspaper brand from financial disaster and invests in new technologies so that it can compete in the new world of digital journalism. As with every marriage, the question is how long the honeymoon will last, and what comes after. 


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