Wednesday, August 01, 2007 7:46 AM
With the confirmation this morning that Dow Jones will be acquired by News Corp, (see News Corp. to buy Dow Jones for $5.6 billion), there is already much speculation as to the long-term transformation of such Dow Jones properties as the Wall Street Journal and Barron's.
It seems evident that the family controlling most of the voting stock in Dow Jones included quite a few members a bit panicked about their nest egg. Perhaps this article, Why Murdoch wants the WSJ, from The Economist says it best:
Nor, more fundamentally, is the outlook for newspapers particularly good. Indeed, as advertising migrates rapidly to the internet, there have been predictions, including in The Economist (see article), that the paper end of the newspaper industry is destined to suffer a severe pruning. The younger Bancrofts look at the Chandler family's failure to get a good price for the Tribune Company—owner of the Los Angeles Times and Chicago Tribune—which was eventually sold cheaply last month to Sam Zell, a property mogul, and the company's employee share-ownership plan. They conclude that they should grab Mr Murdoch's money before he changes his mind.
The evidence of panic goes much further and wider than simply Dow Jones. Indeed, some level of panic seems to be permeating the print news industry in the face of decreasing advertising revenue and a steady loss of subscribers, as well as the inability to leverage new media properties into significant revenue generating vehicles. And, yet some believe that News Corp.'s Rupert Murdoch is one of the few old-media bosses who “gets” new media. Forget the print edition of the Wall Street Journal and focus on its lucrative online edition. Content is king, and the key to success is supplying it through lots of channels, old and new. Look at how News Corp uses websites to generate additional income for its “American Idol” television show. Mr Murdoch is launching a business-television channel in the autumn. All that Dow Jones content would fit right in [Why Murdoch wants the WSJ].
On this same topic, Fortune magazine included a really great article this month, Can the Washington Post survive?, on the business transformation occurring at another flagship newspaper, The Washington Post, which has enjoyed a long run of success, but whose print media properties (from a revenue standpoint) have been suffering along with the rest of the industry. The article's tag line is provocative: Newspapers are dying. At the Washington Post Co., CEO Donald Graham is banking on the Internet to save serious journalism. If he can't figure this out, nobody can.
The first three paragraphs of the article introduce two ideas which underscore the direction that forward-thinking media companies appear to be headed. The first is that reporters are platform agnostic. Meaning that they write for anything and everything within the parent company's domain, from weblogs and other online properties to print editions of papers, large and small. The second idea is new avenues. Meaning the exploration of new ideas, online and off, that separate news (content) from the paper in ways that can be leveraged into new revenue sources.
Barry Svrluga, a 36-year-old baseball writer for The Washington Post, was on his way to the barber when an e-mail pinged his BlackBerry telling him that the Washington Nationals had sent two struggling pitchers to the minor leagues. Svrluga detoured to Starbucks, wrote a 572-word commentary on his laptop and posted it to his blog, Nationals Journal at washingtonpost.com. After his haircut he swung by the Post's newsroom to do a live question-and-answer session online with fans. That night, after filing a story for the newspaper, which he calls the "$0.35 edition" in his blog, Svrluga recorded a ten-minute podcast for the Web site, with sound bites from team officials and players.
Like most reporters at the Post, Svrluga has become platform-agnostic, which is a nice way of saying that his bosses are no longer big believers in print. Today a small army of bloggers, podcasters, chatroom hosts, radio voices and TV talking heads, as well as a few old-fashioned ink-stained wretches, populates the newsroom at the 131-year-old Post. They understand that Donald E. Graham, the chairman and CEO of the Washington Post Co., is hurrying the paper into the digital future. "If circulation is dropping," Svrluga explains, "and we're trying to figure out how people are going to get their news, who am I to say no to trying out new avenues?"
New avenues: That's the story of the newspaper business right now. Alarmed by declining circulation, advertising and profits, America's newspaper publishers - as hidebound a collection of businesspeople as you can find - are thrashing about to see whether they can separate the news from the paper and still make money. They're going way beyond the headlines. [see Can the Washington Post survive?]
If the ideas of being platform agnostic and searching for new avenues continues to pick up steam, it will be interesting to see the direction that these companies move. Perhaps moves like the New York Times Company acquiring online website About.com will become commonplace as print media companies continue to expand into the online world in search of new revenue sources.
Whatever the ultimate outcome, change is afoot and the future for print media companies looks both scary and full of opportunity, depending on your vantage point. Twenty years from now, I wonder if all of us looking back will see that News Corp's acquisition of Dow Jones was a watershed moment in the larger transformation of print media businesses into new media businesses? Good stuff.