Murdoch's WSJ Changes Creates Opening for NYT, FT
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:
via Journalism.org
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Previously:
WSJ Joins the Blogging Crowd
http://bigpicture.typepad.com/comments/2006/03/dow_jones_blogg.html
WSJ: Free or Paid? (Yes)
http://bigpicture.typepad.com/comments/2007/10/advice-for-murd.html
The Media Goes Blog Crazy!
http://bigpicture.typepad.com/comments/2006/06/the_media_goes_.html
MSM Blogging Review: NYT Starts Blogging too
http://bigpicture.typepad.com/comments/2006/03/blogging_review.html
>
Sources:
Editor Out as Murdoch Speeds Change at WSJ
JESSICA E. VASCELLARO, MERISSA MARR and SAM SCHECHNER
WSJ, April 23, 2008; Page A1
http://online.wsj.com/article/SB120887959358334849.html
Graphic courtesy NYT
http://www.nytimes.com/imagepages/2008/04/23/business/20080423_PAPER_GRAPHIC.html
Thursday, April 24, 2008 | 10:00 AM | Permalink
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Comments
Murdoch, as we used to say when I was a kid, is a dink.
Posted by: dark1p | Apr 24, 2008 10:55:14 AM
You're right, Barry. The WSJ is risking its franchise here -- in pursuit. of course, of being a bigger U.S. media platform for Murdoch. The trouble is, while that might ordinarily be an opportunity for the NYT, the media business is changing quickly and it still strikes me as more likely that both companies are in worse places five years from now.
Posted by: Paul Kedrosky | Apr 24, 2008 11:05:12 AM
Where does this leave Bloomberg? Or smaller outfits like Crain's, Barron's, etc.
Posted by: Larry | Apr 24, 2008 11:17:03 AM
perhaps the Financial Times would be a better competitor to take on the WSJ. The FT seemed to avoid competing with the WSJ over US business coverage, concentrating and beating the WSJ on world coverage. FWIW, the FT's op-ed page is at least readable.
Posted by: larrybob | Apr 24, 2008 11:17:56 AM
When the WSJ becomes as unreliable as the New York Post and Fox News, Murdoch will have done the NYT's job for them. At a certain point business readers will have to take facts over ideology. They can close their eyes when it comes to things like Iraq, but we're talking about real money here.
Posted by: edhopper | Apr 24, 2008 11:19:43 AM
FT will more than pick up the slack....much better paper and has an outstanding reportage crew............besdides the NYT is buying out and/or retiring senior people.....takes time and knowledge to be a good journalist and not simply a stenographer...that being said if the NYT picked up the Journals fiancial journos then things could be different
Posted by: GRUMPYOLDVET | Apr 24, 2008 11:20:38 AM
We must give Murdoch the benefit of the doubt here.....
Surely he can leverage his voluminous FBN audience (all 8 of them) into the print strategy.
Posted by: Mr. Wizard | Apr 24, 2008 11:23:09 AM
Got to agree with Grumpy above. We dropped our WSJ subscription when it expired this time- the slant got even more crazy since Murdoch took over. If I wanted to read spin and propaganda instead of finance news, I'd get the Washington Times.
Posted by: tekel | Apr 24, 2008 11:24:35 AM
You're assuming that Murdoch wants to extend the WSJ's reach while keeping the subscription model intact. If he's willing to give up on the subscription, he could pull the rug out from under the NYT.
Posted by: PLing | Apr 24, 2008 11:33:04 AM
The communists at the NYT will NEVER compete for the WSJ readers. This is not to say you do not make some good points.
I would be more concerned about the FT taking away WSJ readers if the WSJ looses its way. The FT is better IMO but not American run so they will have a hard time in our market, but this may create just the opportunity they need.
Posted by: katelab | Apr 24, 2008 11:44:27 AM
the FT is already a better place to go for news in this country.......
I've given up getting anything objectively based from the WSJ years ago....they are nothing more than a larger version of barron's.
I get better news about this country from the FT and the telegraph...which is pretty sad. Along with our juiced indexes today with yet another fresh pile of money to throw at the market.
such a disgraced market we have.
Ciao
MS
Posted by: michael schumacher | Apr 24, 2008 11:51:40 AM
My feeling about the content of the NYT is, gee, I wonder if that story is true. [BR: Even with Judith Miller gone?) Expanding the content is a mistake, as it might make him lean to one side on another. Financial news is just the facts, mam'em, like Sgt. Joe Friday used to say. I like the access to their writers, as I have had questions about storries, and always gotten a reply the same days.
Posted by: Innocent Bystander | Apr 24, 2008 11:52:44 AM
The NYT should copy a page from Microsoft's model, adopt, adapt and extend.
Do, as our host states, via the web ...load up on all the business info to match the Journal. Ramp that up quickly. Once the market realizes the NYT/business is equivalent, the WSJ rate card will be hurt.
Then incorporate the business stuff into the NYT/printed piece by piece.
It wouldn't hurt to swift boat the dubious Murdock. Did you read his nutty column in the WSJ's opinion page the other day? The NYT could pound away the Murdock's integrity in their own pages. Ruthless, but effective (hire some GOP hit men to help them.)
Presto, the world's leading newspaper.
Posted by: VennData | Apr 24, 2008 11:57:10 AM
I have an unexpensed subscription.
The FT does not have direct home delivery in my area. Mys suspicion is that they won't be able to compete with WSj until they can offer the same. Not sure about NYT but I suspect it is the same case.
I am deeply suspicious of Murdoch but if the WSJ goes to far astray it is easy enought to simply not renew it.
Posted by: russell120 | Apr 24, 2008 12:00:33 PM
Barry,
The Boston Globe (a NYT property) is withering into irrelevance - its once world class sports section is losing Gordon Edes to Yahoo, and both Jackie MacMullin and Peter May to buyouts. The Globe appears to be in full retreat - is the NYT exhibiting any behavior that would indicate it is on the advance?
Posted by: ostiguy | Apr 24, 2008 12:04:35 PM
Comrade katelab, I think you underestimate the strength of the international communist conspiracy. Of course we -- I mean, they will compete with the counter-revolutionary dog--I mean, courageous freedom fighter, Rupert Murdoch. I didn't say that. In fact, I am not actually here.
Salut, comrades,
PGW
Posted by: PureGuesswork | Apr 24, 2008 12:05:35 PM
I regard the value of the news somewhat dubiously already, but I have to agree here. The whole value of the WSJ was in the somewhat unslanted financial coverage; if they move to politics / sports / etc I will read the FT only and kick the WSJ to the curb.
Perhaps the NYT should become a financial only paper and take the place of the WSJ? That would be ironic, to say the least.
Posted by: Jackson | Apr 24, 2008 12:20:27 PM
Does Murdoch have any possible business plan to obtain a 20% return on a 5Billion investment? Without such, this was never about money return for him. When this purchase is mentioned, I remember a nature story about a flock of crows killing cows. They start with one crow having figured out how to land on a cow and peck out the cow's eyes. The value to Murdoch is to blind our society from the reporting of factual information. The money is to be made elsewhere with opaque financing and opaque deals. And if nobody ever really knows what he controls, then all the better for him and his. Yes, the NYT could seek to improve its position by taking advantage of the WSJ ruination, but since the NYT continues to play the profit making game, its not clear they will have an opportunity which is profitable.
Posted by: gc | Apr 24, 2008 12:40:20 PM
"In trying to extend the WSJ's reach, Murdoch has left its flank open."...
I have two brief comments that may seem to conflict but they are really of different time horizons
1. The space they are vacating in the short term is viewed as scorched earth (market) due to cost of moving in for a competitior and the recessionary timing. Who wants to move into a shrinking ad base?
2. Traditional media businesses are realizing that producing content and monetizing content are two separate businesses. Mr. Murdoch is probably on top of that dynamic and is trading off concentration on the old school focus and putting emphasis where social media can demonstrate better what is really being demanded by valuable eyes. Those metrics are being defined right now and everything is in play in old media-land.
These are really unique times. The relationship between consumer of content and the content itself has changed so much and will continue to change. This blog is part of that process. Thanks Barry!
Posted by: DaveM | Apr 24, 2008 12:43:29 PM
you know, same thing happened up here in Canada when another successful yet egocentric guy bought the country's premier business paper. Conrad Black took over the Financial Post (great paper) and folded it into the National Post (crappy paper). The FP went from "must-read" to the business section of a struggling 2nd tier paper that seems to be giving out free subscriptions to anyone with a pulse (I actually cancelled it even though they were offering it at $25/year).
So yeah, I think this is a mistake, and will turn the WSJ into an also-ran. Nobody needs another source of neo-con propaganda.
Posted by: geoff | Apr 24, 2008 12:54:19 PM
Barry,
You are preaching to the wrong crowd. The NYT editorial board will take this new move by the WSJ to mean that they need to hire another three Bill Kristols. Count on the NYT to shrink from a challenge.
Posted by: i d | Apr 24, 2008 12:57:57 PM
Murdoch is a genius.
Look at all the fashion stories he's added to the WSJ...to appeal to women...and guys who want to look at pretty girls.
Look at all the personal finance/career stuff in the paper.
He's going to add sports. Hey, lots of guys in business like sports as much as they like business, personal investing, and pretty girls.
So long as the primary focus is business, he'll come out a winner.
And more photos would be good, too!
Posted by: George | Apr 24, 2008 12:59:58 PM
Imagine telling Rupert Murdoch that you know more than he does , the most successful media mogul in the world
~~~
BR: Yes, excellent point, you are correct. From now on, no one should ever discuss, analyze or criticize anything Mr. Murdoch does. He is infallible.
My apologies for the error.
Posted by: BT | Apr 24, 2008 1:01:14 PM
One BIG problem with your idea: NYT is hugely left/liberal, even in their Business section. How many more articles do we need about poor Mary who (didn't really have a gun to her head) took out a mortgage on a property she couldn't afford. The list of anti-capitalist articles goes way, way back.
Sorry, Barry, NYT has NO CHANCE at supplanting WSJ.
Posted by: Lefty Louie | Apr 24, 2008 1:05:26 PM
I get home delivery of the FT and WSJ. When my Journal sub expires I will not renew. Some of my favorite writers have left the WSJ, all saying it has nothing to do with Murdock. Other writers that had credibility with me are now, instead of writing serious pieces, writing puff pieces.
I have long not read the WSJ editorial pages and now I have to hunt for the news in the Journal.
I pay for my own and so after 4 months of Murdock I am thoroughly disgusted with the product.
Posted by: me | Apr 24, 2008 1:07:14 PM
