By dealing with Amazon and non-news organizations, can The Washington Post ‘blow the top off’ the CMS industry?
Shailesh Prakash doesn't want to oversell things. As chief information officer at the Jeff Bezos-owned Washington Post, quality control and customer satisfaction are paramount.
Thus, the caution.
"My biggest fear is that I don't want people to think of this as vaporware," Prakash said. "That's my biggest worry."
Prakash, a veteran executive who's spent his career at tech colossi like Microsoft and Sun Microsystems, is protective of Arc, The Washington Post's content management system. In Arc's early stages, The Post has been mostly circumspect about the business prospects for a suite of web apps that take care of the functions of modern publishing.
But lately there've been encouraging signs that licensing Arc to other news organizations could eventually become an important part of The Washington Post's business. In April, Prakash told The International News Media Association that the overall market for products like Arc could exceed $100 million. On Friday, Nieman Lab reported that The Washington Post has signed contracts to license Arc to nine professional news organizations.
Early details about those organizations reveal that the potential client base for Arc encompasses a wide variety of publishers. There are regional newspapers (the Poynter-owned Tampa Bay Times is one, as is a daily metro newspaper in the Northwest), a pure-play digital site in Argentina, a small media group in central England and clients in Paraguay and Pakistan.
The demand for Arc was pleasantly surprising, Prakash said, but perhaps it shouldn't be given the chaotic state of online publishing. As resource-strapped news organizations have scrambled to adapt to the demand for digital innovation, a gap has emerged between journalists' aspirations for their work and the technological realities at their companies.
"So you end up with newsrooms that have six, seven, eight systems, with a large print footprint in many cases, and then all these hodgepodge of other solutions," Prakash said. "And there you have the engineer's nightmare."
Enter Arc. The Post's pitch to news organizations is a simple one: Let us provide the tools for everything you do — building pages, setting up paywalls, scheduling stories, testing headlines, managing newsletters — and in return, pay us a fee based on how much data you use. The Post offers Arc through a tiered pricing model that starts at $2,000 per month and increases based on the amount of data used by each news organization. The second pricing tier, for news organizations that use more than 10 terabytes of data, is typically between $5,000 and $9,000 per month.
This "software as a service" model is one that was pioneered by a familiar name in The Washington Post newsroom — Bezos, whose Amazon Web Services offers hosting and cloud computing services to organizations around the world.
That's one reason Prakash thinks Arc has the possibility of contributing a sizable chunk of revenue to The Post. All sorts of organizations are publishing online today regardless of whether their primary mission is journalistic — Slack recently announced it's hiring a reporter, as has Ghost and Instagram. Universities across the world maintain publications. Many corporations have PR teams that tell stories about their companies. The Washington Post is already talking to non-journalist clients, including banks, about using the platform. But if Amazon Web Services were to offer Arc, that could make it easier for The Post to sell non-journalists on the idea.
"If, at some point, Arc becomes good enough to have it not offered by us but by AWS, that I think will blow the top off this industry," Prakash said. "Because then you go to Goldman Sachs and JPMorgan, and it's a different story than a newspaper company showing up and trying to prove that they are actually techie."
Among news organizations, The Washington Post's sales pitch has been helped somewhat by its reputation as a digital innovator, said Matthew Monahan, a senior product manager. Unceasing changes to the industry — like the debut of Facebook Instant Articles and Google AMP — help, as does a team of engineers dedicated just to developing Arc. There are about 20 people working to develop and license Arc out of a broader Washington Post technology corps of about 200.
"The past two years have been pretty good here at The Washington Post," Monahan said. "And we've had a lot of time to beef up our engineering team and really focus on building some of these solutions, which are going to help us digitally."
So far, Prakash has been conservative with revenue projections in talks with Washington Post publisher Fred Ryan and Jeff Bezos. It's a small fraction of Prakash's overall revenue goals for 2016. But next year, if all goes well with The Post's initial launch partners, it could contribute a significant chunk of revenue to the newspaper.
But remember, he's cautious.
"At this point, I'm not willing to have everybody start saying that this is the blue ocean for The Washington Post and the publishing industry," Prakash said. "It's still early."