For Bezos, Fixing the News Industry is All About Content
by John Forcucci
Most of my career has taken place at the nexus of news and technology. Before joining Acquia to oversee content and communications, I spent a number of years at The Boston Globe where I helped digitize the print publishing process, transitioned the newsroom to digital tools, and then advocated to move the content to tablets and eReaders.
And so I am watching with great interest as Jeff Bezos, founder of Amazon, takes control of The Washington Post, wondering if this digital visionary can successfully create a business model to once again ensure a healthy news industry in the face of digital disruption.
Here’s the challenge that confronts Bezos: Nearly 90 percent of the owners of tablets and eReaders are very interested in news, but they don’t consume this content the same way they did just a few short years ago. Where big media organizations once tightly controlled the path to the consumer, the consumer has now been freed to blaze their own individual path through the digital landscape. Because these barriers have been lowered, big media organizations can no longer exercise control over the consumer’s path to information. This has disrupted their business, and deflated their revenues.
News is Crucial to Tablet Success
News organizations still have one key asset on their side: News content remains crucial to the success of digital platforms like the iPad and Kindle. Important and compelling content is crucial to a great digital experience. You may have noticed that as each new tablet and eReader has been introduced to the public, news was prominently featured. The Kindle had a very healthy supply of highly regarded news content at launch and when Steve Jobs introduced the iPad, the New York Times was prominently displayed on the screen. Why did cutting-edge lifestyle creator Steve Jobs show such a musty, stale product as news on his shiny new device?
At the crux of things, eReaders and tablets are essentially cash registers. And they will produce revenue in correlation to a consumer’s time spent on the device. Most tablet owners read a lot of news and they tend to be higher-income earners. Jobs, like Bezos, understood that news content connects and engages consumers, bringing them to the tablets for many minutes each day, many hours every week. Do the math.
But to keep this sticky stream of news content flowing to the tablets, the news organizations responsible for origination of most news in this country must be returned to fiscal health.
Definition of Value Changes
News consumers used to receive their daily dose of news in a limited “package.” That “package” was limited to the pages of a daily newspaper, a half-hour news report on TV, or a brief radio news broadcast. Today, we create our own unlimited custom package by grazing the Internet. And, by the way, we now expect information found there to be free.
So what does this mean for the future of news as part of the new Digital Age? News organizations need to rethink many things. For example, can a consumer be satisfied with paying for information coming from just a single news source? At what point will a consumer perceive there is enough value to pay cold, hard cash?
The Missing Business Model
Using the unifying platform of a tablet, much of the best national, regional and local news originated from the enterprise work of news organizations is making its way to the digital consumer. What’s missing is a business model that supports the significant investment necessary to originate news. What we think of as newspaper organizations historically have had the largest news staffs, generating the lion’s share of originated news--news that only results due to the hard work of reporting.
My guess is that Bezos, through his ownership of the Post, will help craft a new business model that will help rebuild the fiscal health of vital news organizations. This will ensure that the powerful audience driver of news will continue to fuel the great digital platform he has created through Amazon and the Kindle.
And so editors and reporters will continue to provide the vital function of the Fourth Estate. Meanwhile, the content they create will keep those digital cash registers ringing up sales, providing the engine for continued mutual success.