In lieu of an introduction, a quick lesson in how to read charts from "Ecologist of Media" Andrey Mir:
"U.S. digital newspaper ad revenue expected to surpass print by 2026" No, the chart shows that, in 2026, print ad revenue will drop below digital ad revenue which will stay flat. pic.twitter.com/iF6igjzTvg
And the headliner from Washington Monthly, June 20:
With his vast investment in The Washington Post’s digital publishing
technology, the Amazon founder could soon control the backbone of most
large American newspapers.
When Amazon founder Jeff Bezos bought The Washington Post
in 2013, he quickly became aware of a longtime problem hobbling the
entire news industry: The technology that news organizations employed to
publish and make money from their content online was wildly inefficient
and inadequate.
Bezos also found a chief information officer at the Post, Shailesh Prakash, with ambitions larger than his budget. Bezos solved Prakash’s budget problems, and the Post built what has over time become a best-in-class platform, conveniently hosted on Amazon’s own cloud computing servers. The Post
started licensing its technology to other news organizations in 2016,
and its digital publishing division, Arc XP, is now a booming business
employing a staff of 300 that is continuously rolling out new
functionalities. It powers more than 2,000 sites for media organizations
and non-media brands that can afford its hefty price tag.
Together with its affiliated ad buying and ad rendering platform,
Zeus Technology, Arc addresses the entire range of technology needs for
digital publishers, from production to monetization. It is precisely the
kind of infrastructure the industry needs to get back on its feet after
two decades of losing every conceivable battle—and a staggering 80 percent of its advertising revenue—to Big Tech companies like Google, Facebook, and, yes, Amazon.
News organizations today have a wide variety of options when it comes
to technology, and other companies—including Brightspot, Contentful,
and RebelMouse—also offer cutting-edge solutions. The New York Times, The Wall Street Journal, and the biggest chains have built their own.
The dilemma we
face is that one of the best answers to the news industry’s technology
woes is in the hands of a man who has repeatedly proved that he cannot
be trusted.
But nobody is devoting the resources that Bezos is to Arc, making it a
dominant player particularly for legacy print publications transforming
to digital first. “We looked at others,” says Tom Shaw, vice president
of Shaw Media, whose print and online publications in Illinois and Iowa switched to Arc in 2020.
“We were seeing the companies we looked up to getting in on this,” he
told me. “Arc was the one that everyone was jumping in on. It seems like
it’s the one that’s growing.” Of the 20 largest American newspapers (by
print publication), eight use Arc.
According to a recent article in Axios,
Bezos has rejected offers to buy Arc that valued the operation at north
of $100 million—because he’s thinking bigger than that. “We are not a
capital-constrained company,” Prakash told Axios. “It’s never a question
of funding, it’s always a question of, is it the right thing to do?”
And the right thing to do, ArcXP President Miki King said, is “creating
more of a velocity in revenue growth.”
Bezos’s control of Arc and Zeus give him significant power over the
news industry. They both allow him to harvest vast amounts of cash from
competitors, even as he makes them increasingly dependent on his
technology. We know, based on past experience with Amazon and its Amazon
Web Services (AWS) cloud computing subsidiary, that being dependent on
Bezos’s technology comes with serious consequences—often including
manipulation, predatory surveillance, and unfair practices. What
initially appears to be a benign solution becomes exploitation of a
trapped client base.
Bezos’s outsized investment means that he could soon control the
backbone of most of the large newspaper markets in America. Meanwhile,
Arc’s high cost creates a barrier to entry for new news organizations
that can’t afford it. It further accelerates the cleavage of the
industry into haves and have-nots. The have-nots—including most small
local and ethnic publishers—often struggle with inferior technology that
stifles both editorial and revenue ambitions, at a time when local news
is increasingly recognized as an essential and endangered public good.
Conversely, if Bezos were to suddenly drop the price of Arc XP and
Zeus Prime, he could potentially drive other platform providers out of
business, allowing him to take a cut of the entire industry’s revenues
right off the top....
However, it's a tough way to make a living. Even Warren Buffet got tired of the economics of newspapers and sold his hometown paper the Omaha World Herald along with the Buffalo News and a handful of other properties.
And the New York Times, long held up as an exemplar of the conversion to digital subscriptions—and for years known for making it difficult to cancel those subscriptions, to the point there are pages and pages of search results for "Cancel New York Times subscription," even NYT can't keep it up without Donald Trump, falling twice as far from its recent highs as the major indices:
