Next month marks the second anniversary of News Corp.'s acquisition of Dow Jones & Co. and its flagship, The Wall Street Journal. Much has changed in the economy since then, and Rupert Murdoch's company is aggressively wielding the relative strength of Dow Jones and the Journal to attack competitors in the weakened media industry.
“There's weakness in the market, and we're taking advantage with the newsweeklies, and the biweekly business magazines, and the local newspapers,” said Michael Rooney, Dow Jones' chief revenue officer.
Twenty-four of the top 25 largest newspapers in the U.S. lost circulation in the 12-month period ended Sept. 30. The sole gainer was the Journal, albeit by a scant 0.61%. The newspaper's combined print and electronic paid circulation of 2,024,267 now makes it the largest daily newspaper in the U.S., according to the Audit Bureau of Circulations.
In the past few months, Dow Jones has accelerated its launch of new initiatives as it looks to press its advantage. A few examples:
??The launch of The Wall Street Journal Professional Edition, which combines the newspaper and access to the Factiva database for a $49 monthly fee;
??The introduction of Dow Jones Companies and Executives Sales, a database of companies and executives aimed at sales people.
??The rollout of a San Francisco Bay Area edition of The Wall Street Journal to take advantage of the faltering daily newspaper situation in the market.
??The installation of a pay wall around the WSJ Mobile Reader.
“A lot of what's been going on this year is that they've been using this as a planning year,” said Ken Doctor, an analyst with research firm Outsell. “I see a number of experiments. Some will work and others won't.”
Despite these aggressive moves, Dow Jones, like most media companies, hasn't been trouble -ree. Its consumer media group—which includes the Journal, Marketwatch.com and wsj.com—has made some job cuts. The Journal recently closed its Boston bureau, and Dow Jones shuttered the Far Eastern Economic Review earlier this year.
Additionally, like most newspapers, the Journal has struggled with advertising revenue. But Rooney said advertising has bounced back recently, in part thanks to year-over-year comparisons now extending back to the start of the financial meltdown. “We've improved on [last] October and November, and we're obviously happy to see that,” he said.
Dow Jones' enterprise media group, which includes Factiva and Dow Jones Newswires, has also struggled. “We've taken a hit,” acknowledged Clare Hart, president of the group. Hart pointed out that her group historically has generated 65% of its revenue from the now decimated financial sector.
Despite these struggles, and thanks in part to the deep pockets of News Corp. (which has $6.54 billion in cash, according to Standard & Poor's), Dow Jones has been able to invest in its business while other media companies are slashing costs.
In the consumer media group, the most visible change Dow Jones has made since News Corp.'s takeover on Dec. 13, 2007, has been the expansion of the Journal's coverage to include more international and political news as it jockeys to position itself as the most powerful national newspaper.
While some argue the changes have diluted the Journal's business-focused brand, Robert Thomson, editor in chief of Dow Jones, argues that the growth in circulation tells a different story. Additionally, noting the increasingly global nature of commerce, he said, “If you're a businessperson, you need more international stories.”
Media buyers have noticed. “It's important that they're adding content at a time when other newspapers are thinner and less compelling,” said Audrey Siegel, exec VP-director of client services at media agency TargetCast. “The real question is whether the Journal can keep it up.”
Other highly visible moves include the Journal's bolstering of its presence in geographies both big and small. In addition to the launch of a San Francisco edition, the paper is mulling local editions in Chicago and New York. The newspaper is also spending heavily in Asia, where the debut of the China Real Time Report, the doubling in size of Dow Jones' India news bureau and the launch of a Japanese-language site are just three among dozens of overseas efforts.
But the most important change may have come behind the scenes. The Journal has unified its content production with a new content management system and the bringing together of the editorial staffs of the Journal, Marketwatch.com and the newswires. “The tribalism of the past is gone,” Thomson said.
Outsell's Doctor said these moves have positioned Dow Jones well for the fast-evolving media world. Content is produced once and can be easily used in several outlets, including the Journal, newswires, Marketwatch.com, wsj.com and Dow Jones' overseas newspapers. Currently, the Journal has a content deal with CNBC, but many observers believe Journal content will be moved to Fox Business Network when the CNBC contract expires in 2012.
“They take the same content. They pay for it once and then move it through print, mobile, the Internet and TV, within the next couple of years. They've mastered the value, the economics, of content,” Doctor said.
The consumer media group isn't alone in instituting change at Dow Jones. The enterprise media group is currently undertaking a “12 products in 60 days” initiative, as Hart calls an aggressive effort to introduce new information products to the marketplace.
The product with the broadest appeal is probably The Wall Street Journal Professional Edition, which is a supercharged version of wsj.com combined with Factiva, a database of 17,000 news and business sources.
Hart said the drive to introduce new information products began in 2007 when her business unit adopted a customer rather than a product focus. The enterprise media group divided its customer base into 10 segments, such as investment banking and public relations. Listening to customer needs, the group began developing new products that took advantage of the information it already had on hand.
The strategy also takes advantage of an enviable customer base, Doctor said. “If you can sell more products and services to the existing customer base, you've really got a leg up,” he said. “And Dow Jones has one of the best customer bases, in terms of both individual and enterprise customers, in the entire world.”
Looking ahead, Hart is optimistic. “It's early, but it is looking better,” she said, adding that it helps that “we have more things to sell.” M