Washington Post newspaper has been bought by Jeff Bezos, the founder and CEO of Amazon.com in a $250 million deal.
This is the latest wake-up call for all the print media amid the changing preferences of the consumers towards digital media.
Last Saturday, even the New York Times had announced its plans to sell The Boston Globe and its affiliate publications to commodities investor and owner of Boston Red Sox, John Henry, for $70 million which is just a fraction of the $1.1 billion they had paid to buy them in 1993.
Explaining this move, Donald Graham, the CEO of the Washington Post Company, said that his family, having owned the publication since 1993, is not the right group to run it anymore. In a letter explaining all this he wrote,” We had innovated, and to my critical eye our innovations had been quite successful in audience and in quality, but they hadn’t made up for the revenue decline.”
Bezos, who took Amazon from being an online bookseller to a fully-fledged e-commerce giant, will have to redesign Washington Post’s business model to improve and enhance the reader experience.
Bezos has been quite successful in innovating around his business model at Amazon, which made revenues of $61 billion last year.
The Post faces a higher cost structure than alternatives but Bezos would probably refrain from making cost cuts on the editorial side because than would eventually kill the aspect that makes the Post valuable and distinctive. It is also unlikely that the print product would be entirely abandoned, since there is still some demand for the printed newspaper.
The Graham family made the Washington Post respectable and a mundane part of the American journalism and Bezos would be expected to do the same.