If Rupert Murdoch succeeds in acquiring Dow Jones, we might has say goodbye to the venerable Wall St. Journal as we know it. Think about it: Rupert Murdoch (media mogul/MySpace owner) and the Wall St. Journal (excellence in journalism, a U.S. institution). What’s Murdoch going to do, with the WSJ? Gut it? The other take on it is that Murdoch recognizes the value the WSJ and Dow Jones can bring to the table as News Corp. launches a new financial news cable network. As well, the WSJ is among the most successful digital newspapers in the world – and certainly one of the few to actually convince people to pay a subscription fee for online access.
In thinking about it, Murdoch’s move on Dow Jones is not a statement – positive or negative – on the North American newspaper industry. Sure, the WSJ is an excellent newspaper but it’s one of the few strong (big city) newspaper franchise left in the U.S., alongside the New York Times and Washington Post. The newspaper industry continues to struggle with the reality it needs to re-invent itself by creating new ways for people to consume its product. At the same time, the industry’s economics are dramatically changing as more companies put more of their ad budgets online. It means newspapers need to reduce operating costs by, among other things, shrinking their newsrooms, while beefing up their online operations. It’s a difficult balancing act because you need to slash costs on one side of the house while making a bigger investment on the other. In theory, this seems like a straightforward exercise but you’re dealing with organizations with long-standing management practices and workforces reluctant to embrace change.
Update: According to Nielsen//NetRatings, more than 59 million people, visited newspaper Web sites during the first quarter of 2007, while the number of page views climbed 10% to 3.0 billion from 2.7 billion a year earlier. For newspapers facing declining circulation, higher Web traffic is an encouraging development. The question, however, is whether more traffic translates in enough advertising revenue to offset its print operations.
In other newspaper news, the Toronto Star is reducing the width of its newspaper (a cost-cutting move), while overhauling its Web site with an improve home page and the launch of a wheels.ca, an automotive site.