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…

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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

Category: Corporate Management, Financial Press, M&A

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

53 Responses to “Murdoch’s WSJ Changes Creates Opening for NYT, FT”

  1. dark1p says:

    Murdoch, as we used to say when I was a kid, is a dink.

  2. 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.

  3. Larry says:

    Where does this leave Bloomberg? Or smaller outfits like Crain’s, Barron’s, etc.

  4. larrybob says:

    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.

  5. edhopper says:

    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.

  6. GRUMPYOLDVET says:

    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

  7. Mr. Wizard says:

    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.

  8. tekel says:

    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.

  9. PLing says:

    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.

  10. katelab says:

    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.

  11. michael schumacher says:

    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

  12. Innocent Bystander says:

    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.

  13. VennData says:

    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.

  14. russell120 says:

    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.

  15. ostiguy says:

    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?

  16. PureGuesswork says:

    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

  17. Jackson says:

    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.

  18. gc says:

    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.

  19. DaveM says:

    “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!

  20. geoff says:

    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.

  21. i d says:

    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.

  22. George says:

    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!

  23. BT says:

    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.

  24. Lefty Louie says:

    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.

  25. me says:

    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.

  26. michael schumacher says:

    Paleeze….

    That all you got BT?

    Why don’t you enlighten all of us as to what the clue is….

    Fool.

    Ciao
    MS

  27. dd says:

    “How Different Is Murdoch’s New Wall Street Journal?”
    “In the Murdoch era, coverage of corporate America has plunged by more than half—to 14% of the front-page space from 30% in the months before the sale. (snip)
    Aside from the business beat, other subjects that experienced drops in coverage under Murdoch include health and medicine, which fell to less than 1% from 5%. Transportation issues fell to 0% on the days studied from 3%.”
    http://www.journalism.org/node/10769

  28. Steve says:

    I’m afraid your reasonable recommendations have already fallen on deaf ears. I think trying to improve the NYTimes is hopeless.

    How will they improve the business section when they offer a buyout to probably the best tax reporter in the US, David Cay Johnston.

  29. Carmen says:

    The NYT is clueless. I’ll go for the FT as soon as my WSJ sub expires, or perhaps sooner. I definitely see it as a plus that the FT is not “American” owned.

  30. Lefty Louie:
    Can you cite examples of the NY Times liberal bias? If they were so liberal why would they hire Bill “William the Bloody” Kristol? MoDo? “Suck. On. This.!!” Tom Friedman? How about all those stories of Bush Admin. lawbreaking they spiked?

  31. BT:
    I suspect you think Donald Trump is an all knowing CRE and casino CEO, right? I suppose he can’t be critiqued either, correct?

  32. daveNYC says:

    I’ll agree that the salmony goodness of the FT is a better bet. They already have good business coverage so it’d be easy enough (relatively speaking) to grab a couple of guys from the Journal and expand a bit.

    The thing that fans of the WSJ should be wondering is, what will happen once Murdoch is finished changing the mix of stories in the paper? The guy has shown himself to be very ‘hands-on’ (so to speak). I would not be surprised if the Journal’s news stories start taking a hard rightward slant by the end of the year.

    Now if he adds those page three girls, then he might have something.

  33. worth says:

    The U.S.-centric view fails to consider the move by Murdoch to take the fight overseas, a development that this excerpt from a 4/22/08 Financial Times column by Luke Johnson illustrates:
    “Meanwhile, Rupert Murdoch now publishes the US daily version of the Wall Street Journal in London. It is a vastly superior newspaper to the European edition, and serious financiers may well feel the need to buy it. At £2.50 ($5) a copy, News Corp must surely lose money on it, but my colleagues on this paper will not be overjoyed at the sight of WSJ’s tanks on their lawn.”

  34. Sharon says:

    Murdoch is killing my favorite paper and hate the guy for doing it. Even before they announced the changes, I noticed the change in the A-section.

    Curse you Bancroft family.

  35. M.Z. Forrest says:

    Any improvements to the NY Times would probably price them out of parts of their present market. It is already an expensive newspaper with desirable demographics, and I’m not sure the new readers would juice their advertising dollars much.

    Presently the Financial Times will probably benefit from the upper end of the WSJ demographic making adjustments. Investors Business Daily has already been working pretty hard to capture the lower end.

  36. dissent says:

    I like the NYTimes for general news but for business and finance coverage that is truly outstanding, I go with FT. That is one great newspaper, unafraid of stimulating debate. It has the best use of columnists and analysis for in depth examination of the financial crisis by far. Compared to the FT, the WSJ at its best is solid but conventional reportage.

  37. john says:

    I’ve been taking the WSJ for forty years both as a expensed item and more recently on my dime. Murdoch is destroying the paper. If I want endless coverage of presidential election I can get it in the NYT or WAPO. Believe it or not I used to love the in depth articles analysing a particular topic. Now we have pages and pages of politics and soundbites. My sub lapse in the Fall and I’m considering my options. Do I go to the NYT or the FT which I used to read when I had a spell in the UK. In my opinion the FT is the one with the opening. I occasionally buy a copy over here and it’s as good as ever but of course doesn’t have the depth on US business that the Journal has. I’ve longed believed the WSJ, the ed page aside which is largely nonsense, is the best paper in America. Murdoch is destroying it.

  38. Greg says:

    WSJ has recently added a third daily opinion page, on the RH side of the fold preceding the usual final two pages of the A section.
    As an expensed/biz subscriber, in the A section I’m now reading only the articles beginning on pp.1-3. The rest of “A” is all politics.

  39. dave54 says:

    Opportunity now for BLOOMBERG on-line & tv, plus THE BIG PICTURE to take market-share from Dow Jones?

    “Could somebody help us please; We got distracted by other stuff and missed what happened in the markets today.” -THE WALL STREET JOURNAL

  40. larster says:

    A key point that seems to be missing is what are we going to do to get the “news”. By that I mean straight, objective reporting that exposes athe scams, frauds, etc. Everyone says that “old media” is dead, yet all I see on the blogs are quotes from stories in the “old media”. Unless someon figures out how to pay for all this and make money, we’re in a world of hurt. I enjoy reading blogs, partixcularly this one, but the reality is they allow me to scan many papers, periodicals, etc, quickly. Eventually we will have to pay to play!

  41. the beginning of the decline of the WSJ preceeded Rupert’s buy…the old Dow Jones started the process of ‘enstupifying’ the WSJ, and Barron’s, years ago.

    The FT should get serious about Home Delivery..from an Information Delivery POV, the FT is way ahead.

  42. My take on Rupert Murdoch is that he basically thinks his audience are fools and it is his job to feed them brainless cheez whiz and take their money, sort of like a scratch ticket with classified ads. Most of Murdoch’s most lucrative media properties are aimed at uneducated, easily led people. Think soccer hooligan and avid Jerry Springer viewers. I don’t see how disdain for your readers’ intelligence is going to work with the WSJ. Murdoch is the Ellsworth Toohey of the far right.

  43. Aiden says:

    I have always liked the odd stories and weekend journal / personal journal items, so when they said a few years back that they were bulking up on these items, I signed up. I agree that the political news and Op-Ed are garbage and go un-read. I also think that the Heard on the street and other columns have really gone down hill.

  44. Bob A says:

    I’m also reading FT instead of WSJ. Rupert Murdoch sucks.

  45. I remember being disappointed when the Journal first went to color. It was a much “harder” before that (well, I was in college, so maybe it was harder because I didn’t know anything). I lost respect for the paper at that moment, and each successive change to popularize the paper has meant a little more respect lost.

    Working on the Street I had a sub to the Journal, but frankly, as a trader, Bloomberg was much more useful. Nowadays, out of the business, I get my market news from the blogs and BB and read the Journal when it is referenced as a link. But only if the article is free, since I don’t feel like paying. Perhaps Murdoch’s greatest triumph–taking over a great newspaper and a fine American institution–will end up being his Waterloo.

    At least, one can hope.

  46. Bob A says:

    I’m just waiting for “Fair and Balanced” to appear on the masthead.

  47. BayAreaGuy says:

    “The fear that paper might shift rightward in its news coverage is so far unfounded”

    Did you ever read the WSJ editorial page? It would be very hard for it to shift any further rightward, Murdoch or no.

  48. bluestatedon says:

    Whether or not the NYTimes has the resources or the inclination to take advantage of what Murdoch is doing to the WSJ I can’t say, but you can bet your portfolio that the WSJ will be taking a sharp rightward swing over the summer months and especially the early fall campaign season. Murdoch, like most of the corporate business community, is not thrilled with the prospect of a Democrat in the White House working with a Democratically-controlled Congress. While I’m sure Murdoch has views that are purely ideological in nature, his real fear is a tax and regulatory environment far less favorable to him financially. He will fight tooth and nail to prevent that, and anyone who thinks the WSJ won’t become a print version of FoxNews in its political coverage and orientation is naive.

  49. Karl K says:

    Awww….you mean Rupert Dupert is gonna take the WSJ and turn it into the The New York Post?

    Boo hoo hoo…

    There’s a reason Rupert Murdoch lives in a $25 million Manhattan apartment, and most of us don’t.

    The New York Times is a dead man walking. Fox News has wiped the floor with CNN and MSNBC. And all of you can snicker all you want at Fox Business News, but let’s come back in 4 years and see where that is relative to CNBC or Bloomberg TV.

    You may not like it, and you may cancel your subscriptions in a huff and turn your noses up at old Rupert, but guess what?

    He’s a businessman. He knows business. And he knows how to win.

    He will win here too.

  50. Sociologists call this phenomenon Prole Drift. Sure, he will “win,” wonderful. He’s a great businessman. No doubt.

    I once heard someone say there’s more to life than money, but that guy must have been an idiot.

  51. This is the 2nd time I have seen this line of criticism of a critique employed by hero worshiping fan boys: “He’s rich, he has a good track record, therefore . . .”

    The first time was when I publicly mentioned I thought Bruce Sherman’s newspaper investments were wrongheaded. His acolytes came out to tell me how much he was worth, his track record, and what an idiot I was for even daring to critique what he did.

    I guess that makes him infallible also. OR NOT.

  52. Karl K says:

    Barry, you were right about Bruce Sherman. Does that make you right about Rupert? That’s the same sort of “logic” that we see from folks like Trimtab — “logic” that you, rightly, lambast.

    Meanwhile, let’s be perfectly I clear — I don’t “worship” Rupert. The same way I don’t worship Wilbur Ross. But there’s are reasons that individuals like that have ascended to the top of the business world.

    You know, there were many out there during the launch of Fox News that pooh-poohed the whole idea. But Rupert and Roger Ailes were so much smarter than those folks, and understood where the underserved and available niches were. And they went in and grabbed them.

    What I find rather amusing is the general tenor of many of these posts — you know, that because Rupert is right wing, and is of course, taking the WSJ in directions that “we don’t LIKE” that, therefore, he is going to fail.

    MORE Trimtab quality logic.

    Or that, amazingly, the New York Times — you know, the same company that is in the toilet because of really really stupid editorial as well as strategic decisions — is somehow going to resurrect itself because Rupert is exercising poor judgment and they can somehow fill in the gaps.

    Yeah. Right. Sure.

    I am sure you will let us all know when you go long the New York Times Company so we can hop on that covered wagon when you do.

  53. Time will tell if I am right about Murdoch — but that clearly isn’t the point.

    My comment above is a response to the fan boy presumption that anyone is above analysis, review and critique based on their past track record.

    Perhaps someone might do us a favor and compile a list of those people who are above criticism . . .