Is Rupert Murdoch’s altering of the Wall Street Journal creating an opening for his competitors?
That was one of the topics we discussed at Tuesday evening’s NYU lecture on media, business, and blogging. This morning, we are going to briefly explore that.
In the past, I have offered up advice to various media. I have offered solicited advice to the WSJ about their blogs, and unsolicited advice about their subscription model. I have also consulted for several magazines in the financial space — a time wasting and frustrating experience.
Today, I am going to offer some free advice to competitors of the WSJ, the New York Times, and to a lesser degree, the FT. In particular, I want to look at how the changes at the Journal may be potentially creating a strategic opening for the Times. Free advice is worth what it costs, so take from it what you may.
When Murdoch took over Dow Jones, he had some very specific plans in mind for the crown jewels of the company, the Wall Street Journal. Murdoch recognizes that the WSJ dominates the space for business and financial reporting. Just imagine what we could do with that platform, went the thinking, if we could only extend that reach and influence beyond financial news. In short, become more like the NYT.
In my opinion, this is a deeply misguided and risky undertaking, driven more by ego than profit motive.
Allow me to explain.
The WSJ is, at present, a must read news source for the financial industry. At our NYU lecture, it was noted that nearly half of WSJ 2 million subscriptions are expensed — meaning, the subs are a tool for the employee paid for by the office. NYT subs, by comparison, are expensed in the single digit percentages.
Its easy to understand why: The Journal has traditionally been a pure business paper, covering corporate activity, Wall Street, venture capital, business travel, investment banking, commodities, fixed income, currencies, corporate earnings, economic matters, SEC issues, etc. There was a smattering of related non business coverage easily justified by the advertising it brought in, along with a few odd stories that broke up the otherwise wall to wall business coverage.
Murdoch’s changes are both ambitious and perplexing: He is seeking to shift the Journal’s coverage to include much more politics, more elections, more general government activity. The Journal itself reported the move to “put short articles on the front page or the
fronts of sections that would not continue on inside pages.” The fear that paper might shift rightward in its news coverage has proven to be unfounded (so far); instead, it is the topics and subjects covered that is what is shifting. Coverage of Financial news is losing out to Mr. Murdochs true love: Politics.
In other words, Murdoch is “De-Financializing” the paper. The coverage looks to becoming less business and money oriented, and more of a general interest paper — kinda like what the Washington Post and the New York Times already do.
In trying to extend the WSJ’s reach, Murdoch has left open its flank. That creates the opportunity for shrewd operators to expand their Business news. Hence, the opportunity for would be Journal’s competitors, and in particular, the NYT, to go after the Journal’s audience. The business goal would be to capture a significant percentage of the Journal’s expensed subscriptions.
How? First, I would beef up the business pages. Hire additional staff, especially the reporters at the WSJ itself. Second, raid the most popular WSJ blogs. They have some terrific coverage there, and that would carry over well to the NYT.com site. Even if unsuccessful in the hires, it makes the operation of the WSJ more costly — a technique not unfamiliar to Murdoch. Expand the business video coverage, using embeddable flash. Lastly, take the very successful Dealbook model — close integration of the blog, newspaper columns, and email list — and clone it to other related business issues: Marketbeat, RealTime Economics, etc.
When a great General extends his army in reaching to conquer far flung lands, a flank gets open. It creates strategic opportunities for competitors. How, and when they take advantage of the opportunity is up to them…
UPDATE: April 24, 2008 1:14pm
I totally agree the the FT is a viable competitor also; indeed, the
opportunity is there — the “flank” is exposed — but I don’t know if
the NYT has the capability to respond in an aggressive manner. (I’ll add FT to the title)
Once the WSJ jumps from CNBC to Fox Business, it will be a race between NYT and FT to see who else slips into that slot.
UPDATE2 : April 24, 2008 11:04pm
Ya can’t go wrong with a good bar chart:
WSJ Joins the Blogging Crowd
WSJ: Free or Paid? (Yes)
The Media Goes Blog Crazy!
MSM Blogging Review: NYT Starts Blogging too
Editor Out as Murdoch Speeds Change at WSJ
JESSICA E. VASCELLARO, MERISSA MARR and SAM SCHECHNER
WSJ, April 23, 2008; Page A1
Graphic courtesy NYT