Your Move, New York Times Company

by Ian Rosenwach on 3.24.2014

Washington Post Bezos New York Times

Last week the Washington Post announced a program for partner newspapers to provide their subscribers with access to paid digital Washington Post content. Initial partner companies will be local papers like the Dallas Morning News and Honolulu Star-Advertiser.

It’s an ambitious first move of the Post under Jeff Bezos, and provides a window into his long-term strategy to disrupt the newspaper business.

Here’s how the deal works- if a paper joins the program their subscribers get access to paid Washington Post products. In one fell swoop, papers can increase the value of their paid subscriptions without investing another dollar! No money is exchanged.

The idea is that this increased value of the partner papers paid subscription will lead to more of their own paid subscribers. The program will eventually go beyond newspapers to include a range of other subscription services like Spotify and Amazon Prime.

Washington Post Partner Benefits…and Risks

If I were a paper considering the program, I’d be open-minded but cautious. Recall how Amazon disrupted the local bookstore followed by retail at large. By using the inherent efficiencies of the Internet and building a consumer brand, Amazon aims to provide a better quality service at a lower cost than traditional incumbents.

If we substitute “local bookstores” with “local newspapers”, it brings up questions about what is in the best long-term interest of the local newspaper – to be the disruptor or to be disrupted.

Could Bezos by using a similar strategy here?

The risk is that their customers forge a strong relationship with the Washington Post brand, lessening their need and loyalty to their local paper. If they get the same or higher quality of news content from the Post, why pay more to subscribe to their local paper? This could be a question consumers might be asking themselves in the not-too-distant future.

It’s true there are things local newspapers will always excel at, like local news and high school sports. But I have a feeling the Post sees an opportunity to gain market share in the long-term in areas that have been traditionally strong for local newspapers. Or perhaps it’s not the local papers that stand to lose the most, but wire services like AP that provide national news.

Aggressively Building A National Brand

The Washington Post is one of three traditional newspapers I read on a daily basis. By read I mean get a daily email with their headlines and queue up interesting articles to read later. My other daily papers are the NY Times and the Wall Street Journal.

I wouldn’t read the Post if it didn’t have a national brand.

The reason I include the Post is mostly for politics news and analysis. I’ve found that no other paper understand how Washington works, and by extension the US government, than the Post.

With this move the Post is aiming to build a national audience. The potential has always been there, but the Post has lagged behind papers like the New York Times and Wall Street Journal in building a national brand. Not anymore.

Now they are aiming to increase consumer brand recognition nationwide, and strengthen their position as a trusted provider of national news.

Moving In On The Times

The company that should be really afraid is The New York Times Company. The Times today is the leading national newspaper brand. They gained that status over years of hard work and many factors, including breaking big news and representing New York City, a place many consider the cultural capital of the nation.

The Times Company is a family-controlled businesses, whose patrons take great pride in the brand and what it stands for. Nothing wrong with that. Sort of like the Wall Street Journal used to be before Rupert Murdoch and News Corp. took over.

This doesn’t mean that the Times will remain as the newspaper of record.

Bezos brings no preconceived notions of what a newspaper should be to the Post. There’s no family legacy to care for; no ego. He means business and is willing to invest for the long-term.

While the Post is thinking how to grow their business and the industry for the long term, the Times borrowed $250M from Carlos Slim, a Mexican businessman. Is Carlos Slim really interested in the long term success of the Times Company? Or is he willing to part with a few hundred million for a year, for the right price of course?

It will be fun be interesting to watch Bezos and the Post rethink and experiment on the newspaper business model, beyond new ad formats and news products.

The New York Times, and their shareholders, would be wise to take notice.

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