Arc is WaPo’s AWS

In 1993, New York Times acquired The Boston Globe for $1.1B and 20 years later, they let it go for just $70M.

By the early 2010s, circulation of newspapers was witnessing a slow death. People started relying on their Facebook feed for news and major newspapers were struggling to stay afloat in the age of internet.

This is when Donald Graham, then CEO of Washington Post, reached out to Jeff Bezos. The newspaper business was being so disrupted by the internet, that Don thought somebody who understood technology could help make The Post successful in the digital era.

In 2013, Jeff Bezos bought the Washington Post for $250 million with his personal fortune. At the time, @jessetaylor had something interesting to say on this acquisition. 

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“Within three years the paper had doubled its web traffic and became profitable – an impressive feat for a media company that struggled in the wake of the financial crisis” – CNN Business. Being a privately held newspaper, WaPo doesn’t disclose earnings, but today they have over 1.5 million paid digital-only subscribers. 

So how did Bezos turn The Post around?

Under Bezos’ leadership, the paper has attracted the top technological talent, built a recurring revenue stream from digital subscriptions and developed a brand new content management system. 

This brand new CMS is called Arc Publishing. 

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“Arc is designed to support content creators across industries, offering a state-of-the-art tech stack that incorporates the publishing expertise of The Washington Post,” said Shailesh Prakash, CIO and VP of Product Development at The Post.

Instead of protecting their proprietary internal publishing software, WaPo decided to package it and license it to other publishers. Sounds familiar – because that’s exactly how AWS was born.

In the early 2000s, Amazon was a successful e-commerce startup struggling with its scaling problems. “Those issues forced the company to build some solid internal systems to deal with the hyper-growth it was experiencing.” – TechCrunch

When they realised they had become highly skilled at running reliable, scalable and cost-effective data centres, Amazon began wondering the possibility of offering infrastructure as a service to other rapidly growing businesses. 

Today, AWS is a highly profitable business and is on track to surpass $30 billion in revenue this year. This high-margin cloud computing service gives Amazon the resources to enter and disrupt low-margin businesses such as e-commerce, grocery and logistics. Jeff helped Washington Post replicate this exact strategy.

Arc primarily focuses on the needs of newspaper publishers and powers sites around the world that serve more than 600 million unique visitors a month. The CMS currently isn’t profitable but the company expects its yearly revenue to reach $100 million in the next three years. That would make Arc the third major source of revenue, aside from advertising and subscriptions. 

Arc Publishing is the high-margin-high-tech business which will give The Post resources (capital & tech talent) to win in the low-margin newspaper publishing business.

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