MarketLine Blog

A digital future for The Washington Post?

Jeff Bezos, the founder and CEO of Amazon, has reached an agreement to purchase the Washington Post newspaper, in a personal capacity, for $250 million. The sale is expected to be completed within the next 60 days and will see Mr. Bezos acting as the sole owner of this leading daily American newspaper.

Prior to Mr.Bezos’s offer, the newspaper was owned by The Washington Post Company, an educational and media group who also own the test preparation company, Kaplan.

The deal, which includes the sale of the paper, washingtonpost.com, and a number of The Washington Post Company’s other publishing assets, follows a six-year decline, during which the operating revenues of the Washington Post Company’s newspaper division contracted by 44%.

The latest figures from the Alliance for Audited Media (AAM) shows The Washington Post average daily print circulation as of March 31st 2013, was 474,767 copies, a significant contraction of -6.5% on the same period from the previous year.

The Washington Post, as with many print newspapers, has suffered in monetary terms with the ubiquitous popularity of immediate information and news updates via the internet, hurting advertising revenues.

A steady decline in print circulation and a sizable drop in advertising revenue has forced a number of newspapers and newspaper chains to file for bankruptcy, introduce restructuring, or be sold.

Restructuring efforts have included some severe measures such as implementing staff reductions, pay freezes, reducing or completely eliminating delivery to minor areas, discontinuing insignificant or minor sections, cutting back on page numbers, and eliminating less profitable editions entirely.

A number of newspapers are also seeking to alter their coverage and appeal by moving away from a focus on breaking news stories, which is an area in which they cannot compete with the internet and the advent of instantaneous information, but are offering more analytical articles.

Mr. Bezos has chosen to take the company private, suggesting he plans to alter business strategy without a need to satisfy any shareholder entities.

In light of Mr. Bezos’s digital content and delivery experience with Amazon, the future expansion of The Washington Post as a digital platform seems a likely proposition. With dwindling audience numbers and a continuous decline in revenues, a move to a more digital fronted strategy could be the approach needed to boost revenues.

Find this interesting? You may also like our company profiles on Washington Post or Amazon.

 

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