Three years ago Jeff Bezos bought the Washington Post; it sought help from the Amazon founder because of his knowledge about the internet. Recently New York Magazine published an overview of the changes that are taking place at the Post with valuable insights and lessons for organisations transitioning to a more digital future!
Notwithstanding several successes that are visible, the Post still has to find a profitable and sustainable new business model. But it has found a wealthy owner to fund the expedition and transition and it’s not wasting a good crisis. If you are still making enough money in the old ways you’d better use it also to fund the transition to explore and define your digital future. This post provides some advice on how to do that.
In 2013 Jeff Bezos bought the Washington Post, a company that had become synonymous with the newspaper industry’s decline. It sought help from the Amazon founder because of his knowledge about the internet. In an earlier post we wrote about some of the changes and contributions Jeff Bezos had made. Last week, New York Magazine published an overview of the changes that are taking place at the Post - with valuable insights and lessons for organisations in other industries transitioning to a more digital future!
Here are some examples:
- Start right away - From the very beginning new employees were hired and added to the digital team and significant investments in new projects were approved; after years of cuts and layoffs. These tangible investments signalled the longer term commitment to crafting a new business model and communicated the priority to provide “more freedom to innovate and take more risk”. They also stimulated people to believe in and commit to a new vision and a new course.
- Change the scene - Earlier this year, the Post moved out of a former printing plant and into a new office “that resembles a tech start up” where “engineers and data scientists sit alongside journalists to integrate emerging technologies into everything the Post does…” Previously, the digital team was relegated to a separate building. Now, large screens on the wall display the typical tv news channels and also the company’s new focus and future: the digital online version of the Post as well as key data and analytics. The result: “we view ourselves as a technology company as well as a media company”.
- Add, do not just replace - Enriching the existing team with technology experts and turning into an organisation that is part technology company does not mean that the existing industry expertise is worth nothing. On the contrary, deep domain knowledge combined with new technology is key to success. At the Post it is clear that Jeff Bezos respects and builds upon the media expertise of the newspaper’s staff. He does not meld into editorial decisions and he has kept Marty Baron, a fiercely independent chief editor.
- Focus on the user - A repetitive theme in the examples given in the article can be summarised as: “don’t focus on the competition, focus on the reader”. The key here is to not just pay lip service but to forge genuine commitment. One example from the article: readers are moving over to social media for their news. Currently the Post is the only major newspaper to publish all of its digital content directly on Facebook’s Instant Articles - at the risk of cannibalising its subscription business.
- Experiment and learn - To experiment and to “fail successfully” has become the norm. The article provides some examples and describes how Bezos is stimulating the transformation during, amongst others, biweekly conference calls with the senior executives. Data is collected about many aspects of the business and the user interaction. Such data is “at the heart of virtually every strategy discussion”.
- Use IT to add value - The organisation is collaborating in different ways with tech companies. Together with Google it is developing differentiating technologies to create a superior digital user interface and user experience. The way readers engage with the digital content is tested and measured in great detail, just like the competition, but the Post has developed some additional tools focused on improving several industry specific drivers to be more successful with its digital services.
- Transform, do not just translate - Users continue to change the way they consume news; they adopt new devices, platforms, distribution channels, develop new habits. New technologies emerge and new competitors pop up and challenge the status quo. Therefore, just translating or extrapolating the off line model to explore and create feasible digital opportunities will not be good enough: “We need to think big and lean into the future”.
- Figure out and commit to new economics - The digital arena works with very different economics. Under Bezos, the Post has chosen to aim for a larger audience and to make less money per reader. It is important to choose and commit: being stuck in the middle will kill you as the digital arena is quite ruthless in many ways. The economics of the digital Post are very different from the printed edition’s business.
- Develop new lines of business - Technology offers the Post entirely new opportunities. Today, it is generating revenues by licensing several of its in-house developed digital capabilities to other media companies. A comparison seems obvious: Amazon started Amazon Web Services (AWS), selling its data center capacity and licensing the tools it was using in its core business. Today AWS is Amazon’s most profitable business.
For the Post, the jury is still out there: “Despite all these experiments, the Post has yet to find a breakout business model.” The article states accurately: “the paper is succeeding in large part because of a very old-media tradition: the support of a wealthy owner”. Perhaps that is not so very different from your organisation if you are still making enough money in the old ways and are using it to fund the transition to digital. Or perhaps your position resembles the Post’s? Then it is time to not waste a good crisis and also copy some of its practices!