Tuesday News: Jeff Bezos buys Washington Post; iPod has been eclipsed; CBS in stand off with Time Warner Cable
Publishing NewsAmazon / cloud / Jeff Bezos / newspaper / Simon & Schuster10 Comments
Amazon founder Bezos to buy Washington Post – I heard some backchat on Twitter joking about Amazon buying HarperCollins and I thought, that seems silly. Bezos doesn’t need a publishing house. He’s created his own. But why, then, did Jeff Bezos buy the Washington Post and other properties? Forbes says that at $250 million, the purchase price was less than 1% of his overall net worth.
Ned speculated, at my request, that it isn’t unlike growing up and buying something you always thought was cool as a kid. Whereas mere mortals we might say, buy a worthless piece of stock of the Green Bay Packers, Bezos buys the whole team. Or in this case, fulfills his lifelong desire to publish the news. All of the articles were clear to point out that Bezos bought the paper personally rather than Amazon.com acquiring it.
In other Boston related newspaper sales, John Henry of the Boston Red Sox is buying the Boston Globe. I know that’s kind of random but who knows whether I’ll want to refer to this five years from now.
CBS Will Lose $400K Per Day From Time Warner Cable Black Out: Analyst – If you aren’t a Time Warner Cable subscriber you may not be aware that CBS and TWC are at “daggers drawn”. In other words, they are fighting over the amount that TWC should pay CBS to broadcast its shows. Not able to come to an agreement, TWC has cut off CBS and all of its cable programming. One analyst suggests that CBS is losing close to $400,000 a day from lost ads and “retransmission consent fees.”
Time Warner Cable’s spat with CBS revolves around so-called retransmission consent fees, which cable and satellite companies pay to broadcasters for the right to carry their channels. In recent years, these fees have become substantial sources of revenue for the broadcasters, and led to financial disputes between broadcasters and cable and satellite providers. CBS wants more money from Time Warner Cable for its flagship network. The cable giant has balked. Time.com
CBS is owned by the same person who owns Simon & Schuster. S&S refuses to come to terms with B&N. Sound familiar? You have to wonder what the overall strategy is here by Viacom. Other outlets have suggested that this impasse between CBS and TWC will be over shortly but I’m surprised at how long the BN and S&S agreement has lingered. I have seen a lot more advertising at Amazon.com by S&S so maybe that’s its solution for books. CBS could offer all its content via the internet for the cut off TWC subscribers, moving people away from an intermediary and selling more direct. Deadline.
iPod eclipse — The comments to this post are almost as interesting as the post itself. Basically the post says that App sales are outpacing music sales (and likely book sales) digitally. And it’s not just games like Candy Crush but also productivity apps. The term “infinite consumption” is used in conjunction with Candy Crush. What that means is you can play the game forever as long as CC keeps adding levels and you can keep spending money on bonus items or new levels. CC requires you to pay for a new level or get three of your Facebook friends to gift you with access.
One way publishers could leverage this is through the “choose your own adventure” style books. While in the book, you could pay to get increasingly more options to change the book’s outcome. It’s not for me, but there may be a market there.
The other interesting thing about that article was how cloud based storage was reducing an individual’s cost in switching from one proprietary platform to another. That’s not really true because the cloud access itself is proprietary. You can’t access the iTunes library on an Android device, for example. Still, it’s given me a lot of food for thought and it’s a post I’ll revisit to think about the implications that extend beyond what Benedict Evans wrote about.
My understanding is that CBS is either already blocking or considering blocking the ability to stream cbs.com content to Time Warner broadband subscribers as well.
I don’t subscribe to cable at all because from a cost-benefit ratio it isn’t cost effective in my house, we don’t watch enough tv for it to be . And even thought this feels like the Clash of the Titans where the little guy is gonna get hosed no matter what, I can’t help but be a little on Time Warner’s side on this. It feels greedy for CBS to want to raise prices that are then passed onto consumers for content that is already ad-supported and free via the airwaves.
Or maybe Les Moonves’ smug face makes me want to kick him in the shins.
So pissed about TWC! They’re just going to pass on any price increase to us the consumer (will probably increase our prices anyway) so I’m upset that I missed the recent Ray Donovan. Oddly we are still getting CBS-not sure why…this better be fixed before Homeland returns!
I grew up in DC, still consider myself from there. I’m extremely nervous about Bezos buying The WaPo. He’s already says he’s changing the name, which is heartbreaking. I’m also nervous about how they’ll cover DC. The WaPo has always been, in my view, the hometown newspaper of the Nation’s Capital. Will his ownership change that? To be completely honest, I’m also nervous that it will change the sports department. I’m a rabid DC sports fan, and their beat reporters are super. If he changes the way they cover DC sports, I’ll be heartbroken. All of it makes me very nervous, but then I’m not a big fan of change as it is.
@Jane: There was an interesting theory about the Jeff Bezos purchase on Morning Joe. Joe Scarsborough noted that leading Dems and Republicans in NYC quake in fear at what Rupert Murdoch will put on the cover of the NY Post to embarrass his enemies. He claims that this is an actual discussion at dinner parties that he attends.
Joe went on to say that Jeff Bezos can use the Washington Post in much the same way. The WP’s articles or cover stories can be used to push back at politicians and lobbyists in Washington, DC who try to curtail Amazon. He brushed aside the fact that most businessmen don’t want to buy a newspaper for the sole purpose of taming his critics if it means losing millions of dollars a year. I think this last point really weakens the argument.
As annoying as the TWC vs CBS war is, it is kind of interesting. I didn’t realize how many networks were impacted until this weekend, when the shows went blank. Now, in lieu of an issue statement showing on the screen, TWC has started playing shows from other networks on the CBS channels.
As a consumer, I’m with TWC. If the demands of CBS are met, that means that all the other cable networks will be re-negotiating for money and I’ll be seeing another increase!
The newspaper will remain The Washington Post. It’s the company named after the newspaper and that sold the paper to Bezos that now has to change its name. Which makes sense since the company no longer will own The Washington Post.
See: http://www.theglobeandmail.com/report-on-business/international-business/us-business/tears-optimism-as-bezos-takes-over-the-washington-post/article13607924/
Plus, Bezos bought the paper personally, not through or for Amazon. I’ll be interested to see how things go.
CBS totally dropped the ball by cutting off streaming to TW customers. They could have come out as the ‘customer friendly’ titan but now they look just as petty as TW and what’s going to happen when customers get used to not watching CBS because they’ve found other shows/networks instead?
There are lots of things the cable and satellite companies do wrong, but I’m with TWC on this. I think it’s entirely ridiculous that cable/satellite companies have to pay to include free-over-the-air channels in the local market – at all.
Yes you can. I do it. You use iSyncr and Rocket Player.