|Sources and notes: Circulation figures are according to Audit Bureau of Circulations audit reports covering 12 months ended Sept. 27, 2009. New York area refers to the New York designated market area defined by Nielsen. Gender and income statistics are according to Mediamark Research & Intelligence's Fall 2009 report; The Times's median household income figure refers to the daily paper excluding the Sunday edition, whose median household income is provided separately at $118,471.|
NEW YORK (AdAge.com) -- Near the end of dinner at Michael's restaurant in Manhattan last Tuesday -- where News Corp. grandees including Chairman-CEO Rupert Murdoch had gathered with Dow Jones CEO Les Hinton, President Todd Larsen and Editor-in-Chief Robert Thomson following a News Corp. board meeting -- iPads started circulating around the tables.
The devices, on which executives swiped and poked The Wall Street Journal app, seem to promise that an even newer version of new media is on its way. But the Journal's near future depends much more on a comparatively pedestrian innovation that was bearing down quickly that night: a New York edition, suddenly less than two weeks from its scheduled arrival April 26. And compared with the iPad's uncertain and only eventual fruits for the media business, the New York edition is going to deliver more than a few impacts right from the start.
For one thing, it's likely to give Mr. Murdoch yet more influence over government in New York City and Albany, something that's gone relatively unremarked amid excitement over his intensifying battle with The New York Times. "There's probably no doubt at all," said Sydney Schanberg, a former Times metro editor who has written critically about Mr. Murdoch. "He has always used his paper to that end."
For another, it will offer advertisers a new way to reach affluent New York audiences, not to mention new leverage in negotiations with the Times. The Journal's New York edition has already signed up Saks Fifth Avenue, Bloomingdale's and Bergdorf Goodman, who collectively spent almost $26 million in the Times last year but less than $1 million with the Journal, according to figures from Kantar Media. David Yurman, a Journal advertiser that spends slightly more with the Times, has ad space in the Journal's New York edition, too. The American Ballet Theatre and Gagosian Gallery, both first-time advertisers for the Journal, will also be there. Others include First Republic Bank and the Mercedes-Benz Tri-State dealers.
And the New York edition will give the Journal an excuse to shout its name while chasing potential readers -- particularly Times readers. "This is going to be accompanied by a very visible marketing campaign, through people's mailboxes, online, outdoor and in print," said Mr. Hinton, who is also publisher of the Journal. His paper is adding "thousands more" retail outlets in New York, including the 450 Starbucks it entered last month, and increasing distribution to its current newsstands. "You can be certain it's going to be hard to avoid the opportunity to buy a copy of The Wall Street Journal when we launch," Mr. Hinton said.
But the Journal's New York edition also represents a multimillion-dollar risk, one where the odds of converting Times readers and advertisers may be longer than anticipated. "I can't see how this is going to make any difference in terms of circulation," said a circulation executive at another paper. "The people who have been getting the Journal are going to get the Journal. The Times has got enough of a personality. .... I don't think there are a lot of marginal Times subscribers out there who are looking for reasons to drop."
The Times is banking partly on the readers it considers loyalists: 360,000 subscribers in the New York area it says have subscribed for two years or more. The Journal's new section is a good start, but won't lure those readers away, according to Scott Heekin-Canedy, president-general manager of The New York Times.
The Journal's freestanding, full-color New York section will stand out better, without a doubt, than the New York coverage in the Times, which merged its freestanding metro section into the front section in 2008 and does not run in full color.
But The Times says it has been enhancing its metro reporting, which will next see more coverage of city events in its weekend section. Its website has begun collaborations with the City University of New York and New York University to feed community blogs about Fort Greene in Brooklyn and the East Village in Manhattan. And later this spring The Times plans to introduce a free, ad-supported iPhone app on city life.
The Times will also run some consumer advertising to blunt the Journal's push. "But we're not going to get into a marketing war with the Journal," Mr. Heekin-Canedy said.
The war for advertisers, on the other hand, will be real. The Times starts off with the advantage, buyers said, because many big marketers such as department stores particularly want to reach women.
The Journal's daily readership, however, was 62.3% men and 37.7% women in the most recent audience estimates from Mediamark Research & Intelligence, compared with a Times readership that was 51.1% men and 48.9% women. And the Journal may be a bigger paper nationally, but so far it lags behind the Times in New York. The Journal had 284,224 paying readers in the New York market area over the 12 months ending last September, according to the Audit Bureau of Circulations, compared with 495,048 for the Times.
Because of those reasons, "It's going to be hard for them to all of a sudden shift dollars to the Journal," said George Janson, managing partner and director of print at Group M, a media-buying agency. "If it's a time-sensitive message where they really want to heavy up in the New York market, it may have some relevance, but other than that there's not a line of people outside of my door saying we've got to get into The Wall Street Journal New York edition."
The Journal counters that its female audience has been increasing over the past few years -- and that its female readers are more affluent and more likely to be employed than their Times counterparts. Its whole audience, for that matter, has a higher median income than Times readers, according to Mediamark. And many advertisers with New York interests have used The Journal for years.
"Many of these advertisers know the effectiveness of this product nationally or they've been able to buy regions," said Michael Rooney, chief revenue officer at The Journal. "The good news for me as an ad seller is they know it works."
The intensifying newspaper war between the Journal and the Times may be good news for the media business at large and for print in particular. "It's exciting that someone is investing in print," said Mr. Janson. "It's going to be a longer process, but we all know Rupert is patient, and God knows he has enough money."
And don't imagine that Mr. Murdoch will stop with New York. The Journal has already moved into areas where other papers fell back, such as San Francisco, where both it and the Times have local editions, and Detroit, where it launched a marketing blitz when the local papers cut home delivery to three days a week.
"If this works for us," Mr. Hinton said, "there are other parts of the country that we would look on as potential next steps."