cmyk Trends
Independent Thinking on the Printing Industry
  • off-set blog
  • Jochen Meissner

Nobody reads newspapers... 

8/8/2013

 
... but people still buy them.  Just in the last few days Jeff Bezos, the founder and CEO of Amazon bought the Washington Post for $250 million and Red Sox owner John Henry acquired the Boston Globe for $70 million from the New York Times which itself had paid $1.1 billion some 20 years ago.

While these two - not untypical for the kind of people investing in newspapers today - are very bright and successful individuals, the hope that they will quickly find the solution to stem the decline of the industry is unrealistic.  So is the rosy-colored view that these are just trophy (or charity) investments that do not need to make money anytime soon.

In contrast to Sam Zell's "acquisition" of the Tribune, which in retrospect looks more like a bad real estate bet on the Olympic Games coming to Chicago, I believe that the new owners of the Post and the Globe actually have plans to make these properties successful again.

Despite its label as a web based hi-tech company, Amazon is very much a bricks and mortar organization with warehouses and distribution centers all linked through a powerful, highly integrated system with a superb web based front-end for the customer. 

Mr. Bezos, being used to Amazon's automated 24/7 logistical systems, may ask his newspaper managers why their capital intensive printing and mailroom equipment is sitting idle except for a few hours a day, in many cases further hampered by an inflexible union environment.   Compare that just with the operation of a magazine or catalog printer and you can see the potential without even leaving the domain of printing. 

His deal also includes The Post and its Web site (washingtonpost.com), along with the Express newspaper, the Gazette Newspapers and Southern Maryland Newspapers in suburban Washington, the Fairfax County Times, the Spanish-language newspaper El Tiempo Latino, and the Robinson Terminal production plant in Springfield. Bezos will also purchase the Comprint printing operation in Gaithersburg, which produces several military publications.

That does not look like a trophy investment if you ask me.  Amazon already has about 30 distribution centers in the US, with six of them being in Delaware and Pennsylvania.   Maybe the real estate is of interest after all.  Another angle could be access to the newspaper industry's home delivery system as an alternative to USPS, UPS etc.

Let's also not forget where Amazon started. It changed book selling forever.  And today book printing is not dead (despite Amazon's Kindle) but digital inkjet is changing the production models.  Maybe the next time you order a book on Amazon, it is being printed on demand in an Amazon facility nearby and dropped off with your daily newspaper the next morning.

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