Posted by: structureofnews | April 11, 2011

Picture = 1,000 Words

Not much to say here – but this graphic, by the Washington Post, pretty much spells out how dependent the paper has become on Kaplan to keep the overall company going.  Kudos to the Post for digging into the problems at the company that helps pay the bills (although some would argue that it should have done more earlier.)

The idea of having a separate, profit-making arm of a media company that subsidizes the public-service mission of a news organization is a seductive one; and the Washington Post/Kaplan combo has been the poster child for that model.  But as Kaplan’s recent travails show, that’s not a cure-all for the news business any more than any other quick fix is.

More broadly, if you did have a profitable company, why – outside of a great sense of altruism or a desire to influence public opinion – would you want to use that money to keep a money-losing news organization afloat?  Not that there’s anything wrong with that – and more power to the people who are willing to do that.  But that’s not any more sustainable a model than expecting rich people to keep supporting you.

In any case, the Washington Post Co. has a new set of issues now, as the Post itself reports in the story:

“The company is more dependent than ever on a single business,” (Post Co. CEO Don) Graham wrote in last year’s annual report, adding that the newspaper had never accounted for as large a share of overall company revenue as Kaplan does today. “This new order of things suggests that shareholders are looking at a different set of realities,” Graham said.

Cross-subsidies aren’t a bad thing; but we can’t all hope that some completely unrelated business will come by to save us.


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