Top Washington Post executives recently came to owner Jeff Bezos with a proposal. The company had spent the better part of a decade turning an in-house publishing tool into a broader software business, with some success, according t o The Wall Street Journal.
The Post’s software, known as Arc XP, now services the likes of pro basketball’s Golden State Warriors and energy company BP PLC. But the business, the executives said, had reached a crossroads and the Post needed to explore a spinoff or sale to realize its potential, according to people familiar with the discussions. Mr. Bezos gave his blessing to explore those options, they said.
For news companies that are mostly reliant on advertising and subscription revenue, developing an entirely different line of business is attractive. The Post expects Arc to generate over $200 million in annual recurring revenue by 2027, a roughly fourfold increase over its contribution now, according to a document reviewed by The Wall Street Journal. The business isn’t profitable, so far.
As with several other news organizations, the Post’s traffic and subscriptions have fallen after a surge during the Trump presidency and the start of the global pandemic. Ad revenue at the Post is expected to be down this year compared with last year, as marketers rein in spending, according to people familiar with the company’s financials.
The Post is on pace to generate around $600 million in revenue in 2022 and has over 2.5 million subscribers, down from three million in January 2021, the people said. The company isn’t expecting to make a profit this year, they said.
No comments:
Post a Comment