Wednesday, September 4, 2013

Bezos Needs To Learn the First Rule of Newspaper Ownership

Amazon founder Jeffrey P. Bezos demonstrated yesterday that he desperately needs a primer on the publishing business before he buys The Washington Post next month.

In his first interview since the purchase was announced, Bezos showed his naivete about the industry with this comment:

“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient. If you replace ‘customer’ with ‘reader,’ that approach, that point of view, can be successful at The Post, too.”

The last time I looked, the vast majority of American newspapers’ revenue came not from readers but from another type of customer – advertisers. Sure, perhaps Bezos knows better and decided to emphasize the noble journalistic side of the business rather than the grubby capitalist side.

But he didn't go out of his way to curry favor with advertisers: "I’m skeptical of any mission that has advertisers at its centerpiece."

Many of the Post’s advertisers, who view Amazon as a ruthless and even unfair competitor, are already wary of a Bezos-owned Post. Knowing that his vision for the Post apparently does not include pleasing them will do nothing to allay those fears.

Bezos needs to learn the first rule of owning a newspaper: Don’t piss off your advertisers; that’s what reporters are for.

Other Dead Tree Edition articles on the newspaper industry include:


BoSacks said...

Deaddy: This is interesting to me. I think Bezos has it right and did say what he meant to say and that his mantra is transferable to the newspaper industry. The customer is/and should be first. The old ad focus newspaper model is crumbling. Why not reverse the internal thinking and cater to the customer. If the “right” customers are there the ads will follow. As a successful publisher of a small local electronic newspaper, I feel comfortable in suggesting that too many papers do not deliver what the reader wants. I did and had a 85% opt-in penetration of all the adults in town and the open rates we around 65% to 70% each issue. Just give the readers what they want, and you would be surprised at the results. Bezos is right.

Jim Sturdivant said...

I agree with Bob (though I only just saw his comment). See my post here:

Alex Brown said...

You're very right that the core customer is the advertiser. It's important to hit this point because the sweet, rosy, unicorn-filled future of publishing as something that readers/viewers will sustain has more cracks in it than we have mortar to patch.

If there will ever be a fix to the business model, it's going to come from refining the key definition of it: right now, publishers buy readers and sell them to advertisers. Can we get better at buying them, or finding them in ways others can't? Can we sell them in new ways that others can't?

Fundamentally, it all starts with buying readers/viewers. Acquiring them used to be a somewhat passive result of producing material they wanted to read/see. The active component was making sure they knew you had it available. Both dimensions have been changed by the internet, but the central premise remains.

I don't think Bezos is any better equipped to solve this, but having money and patience will allow him to try more than once before hitting the ejection seat.

Bill Garber said...

Bezos' focus on readers is absolutely where the money is going to come from. And it won't be a subscription to access the newspaper on line--he has said as much.

Critics should be ready to feel the envy boil up until it is in their throat and cutting off their philosophical oxygen.

Advertisers are going to be begging, while Bezos merely smiles in reply.

And the President may well have already ask his staff to point out the on-ramp to the straight and narrow.

Journalism schools are taking a deep breath.

At last ...

Andy Kowl said...

It's always been quite simple: with readers you get advertisers. If you please advertisers in some other way, you can lose readers, then those momentarily pleased advertisers will leave anyway. Readers always come first.