Wednesday, August 7, 2013
Bezos Vows to Reinvent The Washington Post as the Amazon.com of Journalism
SAN NARCISO, Calif. (Bennington Vale Evening Transcript) -- Jeffrey Bezos, the billionaire founder of Amazon.com, purchased The Washington Post this week for $250 million. The 135-year-old paper has a storied history in the annals of American journalism, which includes the groundbreaking reporting by Bob Woodward and Carl Bernstein of the Watergate scandal during the 1970s. The duo uncovered what is still considered the biggest story in U.S. politics, exposing a complex system of "dirty tricks" and crimes from the highest levels of power in Washington. Their tireless efforts led to the indictment of over 40 administration officials and the eventual resignation of President Richard Nixon. But that's old news to Bezos, whose success selling online books and then popularizing e-books helped Amazon blossom into one of the world's most thriving retailers, ultimately proving that print is dead. Bezos said he wants to reanimate that corpse as a 21st century cyborg, and promised to innovate The Post with key elements of Amazon's business model. His first step will be to rebrand the paper using the Brazilian-themed naming conventions commonly found in components of his online megastore. The Post will soon be christened A Fofoca, following this tradition.
Journalists, electronic commerce experts, Internet aficionados and business analysts have showered Bezos with praise for his latest acquisition. They feel Amazon's CEO can infuse The Post with fresh thinking, deep pockets and the elimination of "baggage" by applying his tech industry savvy and introducing platforms such as e-commerce, frictionless payments and social media. And Bezos agrees.
In 1997, Barnes and Noble sued Amazon for claiming to be the "world's largest bookstore," asserting it was instead "a book broker." Bezos settled the case out of court but ultimately embraced the idea. He envisions a similar fate for A Fofoca, nee The Washington Post.
"Jeff sees no real value to the consumer in a physical newspaper," said Luna Vendedor, a sales and marketing executive with Amazon who will head up the reorganized operations of The Post. "We're going to become a news broker, a discount content distributor."
The first step in the transition, she noted, will be to reinvent The Post as an entirely online organization, destroying its brick-and-mortar presence, its pricey and outdated infrastructure, and its former glory.
"The Post put all its eggs in one basket: reporting on current events," Vendedor said. "That's a blase and ineffective approach to profit generation, complicated by an inability to provide instant delivery. To succeed, as Amazon has demonstrated, The Post's portfolio needs to be dramatically diversified and accessible in real time."
As The Post gradually transforms into A Fofoca, it will take on the look and feel of Amazon.
Like commodity sales, peddling the news is a cut-throat business. Bezos views traditional papers as the same breed of lumbering dinosaur that traditional stores were before Amazon revolutionized the principles of commerce. The overhead associated with running a physical space drives up product costs for buyers. That's why A Fofoca's new operating strategy will mirror Amazon's.
In scaling back overhead, the publication will follow in Amazon's footsteps by luring customers away from brick-and-mortar competitors, hopefully ruining them as Amazon did to Borders. It will also concentrate on outsourcing product distribution to cheap labor sources, enforcing streamlined working conditions that cut costs by eliminating unnecessary expenses like air conditioning and breaks, launching anti-unionization efforts, capitalizing on public subsidies, removing editorial oversight to prevent censoring original works (including those riddled with errors, containing libel or endorsing illegal activities), and rolling out price discrimination strategies.
News Brokers, Not News Writers
Amazon.com does not manufacture the products it sells; it distributes the work of others. That represents a tremendous reduction in costs, with those savings passed on to the consumer. Bezos asks, why should journalism be any different?
"If you think about it, all reporters are essentially brokers," said Vendedor. "Unless they work for Rupert Murdoch or Roger Ailes, they're not creating the news; they're just writing down what happened to others. What other people did. What other people told them about."
"If Amazon actually developed all the random junk it sells, we'd be out of business tomorrow," she added. "We endure and grow because we focus on cheap, outsourced distribution centers where we can avoid those investments, along with paying certain taxes or adhering to strict labor standards. Our newspaper is going to benefit from the same."
A Fofoca will instantly do away with The Post's physical operations. No more revenue-sucking printing facilities, distribution fleets, paper delivery boys and girls, pricey real estate, travel expenses for reporters or raw materials costs.
"The news will come from other publications. Those idiots can fork out money to pay unwieldy staffs of proofreaders, copy boys, writers, editors, fact checkers, you name it," Vendedor said. "All we're going to do is distribute those articles through the web. Just a couple of servers, a new domain name and a website."
A Fofoca will likely maintain a skeleton crew of journalists, but the terms and conditions of their employment will echo the zero-hour contracts Amazon uses in the United Kingdom. Under zero-hour provisions, an on-call arrangement is created between A Fofoca and the journalists. The reporters have no obligation to accept assignments and the news outfit has no legal obligation to pay them.
"Our internal reporting teams will receive pay only for the hours they actually contributed to writing the news, not using the restroom, making phone calls, taking lunch breaks or doing research," Vendedor pointed out. "We're also exempt from sponsoring any employee benefits, which will significantly help us maintain our edge when Obamacare finally comes into play."
News Hubs, similar to Amazon distribution centers, will house small groups of "story aggregators" in warehouse-like environments to ensure a constant flow of on-demand news.
"News Hubs will look like call centers, where workers coordinate constantly with our news sellers to gather and post stories as they happen," Vendedor said. "Jeff believes this model could enable A Fofoca to scoop nearly every competitor. So much time gets wasted vetting information, following up on leads, brainstorming stories and editing content that a story is already old by the time it posts."
As with existing Amazon sellers, A Fofoca will also be able to close accounts or withhold funds without notice for news sellers that fail to meet the established performance standards.
You Choose the News...Or Write It
On Amazon.com, users submit reviews for each product with a one-to-five star rating scale. A high number of positive ratings and "helpful" hits affects rank. Vendedor wants to utilize the same system for A Fofoca's articles.
"I find it elitist that newspaper editors and publishers subjectively determine which stories are worthy of front page coverage," she said. "For instance, I don't personally care about the crisis in Central Africa, but that's the headlining piece in today's New York Times. We believe readers should be able to choose the content that matters most to them."
Vendedor described a similar ranking system that will be part of A Fofoca. Readers will rate and review incoming news stories. The most popular pieces will move to the front pages, while less popular articles drop from the headlines.
"So a boring story about some problem in Africa will end up in the 'Other' section, while Tony Stewart's broken leg will occupy the main page," she illustrated.
Amazon also helped pioneer self-publishing, creating a viable and profitable alternative for writers. Many authors have abandoned the creative and economic constraints of publishing houses to produce their own e-books. Vendedor believes A Fofoca's Amazon-like business model will encourage journalists to do the same, publishing their own content for sale directly through the site.
Readers are not required to pay for a subscription, although they can select unlimited access through A Fofoca Prime. Otherwise, readers can purchase stories on a per-article basis for pennies on the dollar.
"The best part is that authors keep 60 percent of that revenue," Vendedor noted.
Seamless Amazon Integration
As an Amazon company, A Fofoca no longer has to worry about staying in business by pursuing dwindling advertising channels. Amazon affiliates will be able to display their ads on A Fofoca using the same service they rely on today. More importantly, Vendedor observes, Amazon's advanced algorithms will help A Fofoca's readers find products targeted to their preferences.
"When people read a news article, the system can automate advertising specific to them," Vendedor said. "It all feeds back into Amazon. For example, if you were reading about a mass shooting at a school, our system might direct you to a link on Amazon where you can purchase the same gun the killer used to slay his victims. Or if you had read about a teen who committed suicide after listening to a particular band, the system might suggest downloading that CD or MP3, which you could purchase right from the story."
Bezos has not released a date for The Post's official relaunch as A Fofoca, but Vendedor said she expects an announcement before October.
2013. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License. See disclaimers.