How the Washington Post Makes Money From Its Competitors
Since Amazon CEO Jeff Bezos acquired the paper in 2013, the Washington Post has seen a significant turnaround in its fortunes, to the point where its online readership rivals that of the New York Times. But it’s not just good journalism or advertising revenue that has helped the Post reach this position — the newspaper has also become a technology vendor.
The technology that the Post sells is the custom-built publishing system it uses to run its website and digital publishing operations, a piece of software known as Arc. Over the past year or so, a number of major publications have licensed the tool from the Post, including the group of newspapers formerly known as Tribune Publishing, now known as Tronc.
Tronc announced a deal to license Arc on Monday. It will start by integrating the Los Angeles Times, one of the company’s flagship papers, and then roll the Post system out to the rest of its newspapers across the U.S.
What makes Tronc’s licensing of Arc particularly interesting is that when the newspaper chain re-branded itself last year and turned down a $600-million acquisition offer from Gannett, it made a big deal of the fact that it was going to leverage “innovative technology” that it planned to develop itself in order to turn around the firm’s financial fortunes. In fact, it’s doing the exact opposite by licensing the technology from the Post.
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The Post has already licensed Arc to newspapers like the Globe and Mail, Canada’s largest national newspaper, and the New Zealand Herald. The company said Monday it is also setting up a self-service version of the publishing system online that will allow any media company or publisher to adopt Arc at any time.
At the moment, many newspapers and other online publishers use one of a number of online publishing systems such as WordPress to run their digital operations, while another — usually cumbersome and expensive — content-management system runs the print side.
Arc is a suite of tools that the Post developed in-house to make it easier to produce various kinds of content both for the web and for mobile apps, and then to manage the editing and publishing of that content, as well as the monetization of it through advertising and other methods.
Arc also tracks a number of analytics and makes it easy for publishers to test different headlines, to put content behind a paywall, or to publish it to platforms like Facebook’s mobile-friendly Instant Articles feature or Google’s competitor, AMP.
According to a report in the Wall Street Journal, the Post‘s owner sees Arc as having a similar model to Amazon’s cloud-based Amazon Web Services unit, which makes billions by allowing companies to run their businesses using virtual servers and processing power. Arc is hosted on AWS servers.
The Post charges smaller publishers about $10,000 per month in licensing fees to use the software, a cost that can rise as high as $150,000 monthly for larger publications. The Post‘s chief information officer, Shailesh Prakash, has said that he believes the Arc licensing business could eventually generate as much as $100 million in revenue for the company.
A number of other publishing companies have talked about licensing their publishing systems, including Vox Media — which developed an in-house system it calls Chorus, and has licensed a version to some advertisers and brands — and the former Gawker Media. But the Post seems to have already been more successful than most of its competitors.