Washington Post to Re-Brand Itself
Important Details: Washington Post Chairman Donald Graham said the obvious, but sometimes the obvious marks an unacknowledged turning point. At a UBS Global Media Conference ( or “Media Week” as it is popularly known), Graham told Wall Street media analysts that the company would emphasize its educational revenue engine more publicly. The Post, he said, is now an “education and media company”. He expanded, “In 2008 and going forward, The Washington Post is really going to be an education and media company. I don’t say this for cosmetic reasons, because I don’t care about cosmetics. I do not say it to deemphasize the importance to me or the importance to our results and to our shareholders of the media properties in the company. And this absolutely does not mean and will not mean in the future that The Washington Post and Newsweek mean less to me or the people running the company than they did.”
Graham went on to say that while the company’s once-core assets (its journalism companies) were still key to its future, it was the growth engine – Kaplan, Inc. – that the company would increasingly talk about. And then he did, focusing his presentation on the Post’s education division, which brought in 49% percent of the company’s revenue in the first nine months of the year, with a growth rate of 21%. Revenues from the group’s flagship newspaper title make up only about 20%.
His comments about the state of the transforming newspaper business, while shorter, were to the point: “Anyone presenting from the point of view of a newspaper company will tell you that 2007 was a worse year than we’d hoped…It is as plain as day that people do not have the appetite for newspapers they once did.” Graham, though, believes his company, while not there yet, will find ways to satisfy new appetites: “I don’t think we or anyone has produced a definitive 21st century news site… but that’s our aim….The crackle in the mind that a good morning newspaper can produce has to be duplicated online or on a mobile device in the future.” Most immediately, Graham says he thinks the 2008 US election offers a new opportunity, believing that most web users will visit the Washington Post site at some point during the election – the Post’s goal is to turn those one-time visitors into longtime readers.
Implications: Outsell believes that it’s a sign of the troubled newspaper times that such a simple acknowledgment should be so widely discussed. It’s painfully obvious that pure-play newspaper companies, like McClatchy and MediaNews, are having the toughest time navigating the print-to-digital transition. Those companies that have other significant non-newspaper sources of revenue are finding ways to offset — and maybe, in future, subsidize — traditional news operations. Such companies are many, including fast-growing, Dow Jones acquiring News Corp, which, despite its name derives 80% of its revenues from such pursuits as movies, cable and satellite. Hearst, Scripps and DMGT, all with holdings (cable, Internet, business information and more) outside newspapers are therefore better positioned for the news industry’s continued decline. Those companies that have diversified over the years by owning broadcast assets are in less good shape – broadcast is maturing just as print is, though it’s not plagued by huge classifieds losses.
It’s silly to hear such comments as those of New York Times Executive Editor Bill Keller, as he tore into the long-time rival Post, here in a recent American Journalism Review story: “While professing ‘unqualified admiration’ for Don Graham and Post Executive Editor Leonard Downie Jr., he says ‘the reality they’re dealing with is that it’s not really a journalism company’; rather, the Post ‘is one of the properties that the Kaplan Co. owns,’ and is ‘certainly under a lot of pressure.'”
For companies that care about their journalism, having other pots of money to draw from is essential. Those pots can be either other business lines or private funders willing to absorb market fluctuations or even major structural industry change. But the money has got to come from somewhere to keep the newsrooms humming, and Graham’s record in Washington and his announcement this week is as good a way as any to fund the journalistic enterprise. One hopes that Keller’s own company, largely a newspaper pure play, won’t be forced to eat his hasty words.