The Real Challenge for Bezos: Do People Want to Read the Post?

The flagship of New York Times Co. (NYSE: NYT) and The Wall Street Journal each ran lengthy articles about how Jeff Bezos could transform the flagship of the Washington Post Co. (NYSE: WPO) into a success by using his experience with e-commerce, digital marketing and data mining. None of these will help the famous paper, a fact that has been lost in the speculation about how it may be turned around.

The fact of the matter is that the best sign of the problems at the Post is the massive drop in its circulation. Depending on which measure is used, the circulation has fallen by a third or more in the past decade. By that measure, the paper is slightly larger than the Chicago Tribune or Chicago Sun-Times. And Washington is a one-paper town, without the competition that the two Chicago papers have with one another.

Bezos cannot work the magic that has helped him build Inc. (NASDAQ: AMZN) in light of the number of competitors the Washington Post has, because technology cannot entirely trump consumer habits. Ultimately, the paper is overwhelmed with competition that it has spent years battling, to a greater and greater extent.

In the world of national politics, Politico usually is mentioned as what has done the Post the most damage in this field. The analysis is accurate. Politico has an editorial staff that numbers more than 100. Politico also has diversified its coverage enough to compete with the Post in several arenas outside political coverage.

The Washington Post’s local competition has grown because it is so inexpensive to start Web properties. Local television stations could only challenge the Post when they had news on the air. Otherwise, their programs came from national networks, in the daytime, prime time and late night periods. Now, the four network affiliate stations run local news all day long at their websites, which they can promote on TV. Just a decade ago, these sites could not have existed.

The Post’s most powerful competitors are in the national and international news business. Not long ago, The New York Times, USA Today and The Wall Street Journal needed to distribute print editions of their products around Washington to effectively compete. Their online editions make that expensive mode of distribution obsolete. In addition, all the print media that cover national and international news through digital editions have to battle with huge television network-based sites, which include, at the very least, those of Fox, NBC and CNN.

No amount of data mining can combat the relentless move of content on the Internet, which has crippled the Washington Post locally and in the areas of national and international news. Bezos should know that as well as anyone.

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