There are some basic patterns that seem to repeat themselves through the publishing industry, one of them being the relative attractiveness of subscriptions in a down economy and the relative attractiveness of ad-supported publishing in an up economy. With the global economic cycle already beginning to cut into online advertising money and that money spread across more high-quality online inventory than ever, it's not really a surprise that there's some reaffirmation of subscription models at Dow Jones. As noted in The Wall Street Journal, News Corp Chairman Rupert Murdoch underscored in comments at the Davos World Economic Forum that Dow Jones would be continuing a subscription component to the WSJ's online offering, even as it expands its free offering to a far broader online audience.

Dow Jones has little to lose and quite a bit to gain by trying this "guns and butter" approach to online monetization. With about two million affluents and influential online subscribers, WSJ offers strong demographics to advertisers who would otherwise be left to compare only WSJ's open Web assets with other quality online content. WSJ will hold its own with those competitive products, to be sure, but why toss out higher ad rates if you don't have to? By expanding both search engine exposure to much of WSJ's online content and continuing to build an online club for elites there's reason to think that the Journal is headed towards a comparatively robust year of growth.

The main question is, what will keep the subscribers coming back for more? We've mentioned in earlier posts that the subscription component could be used to leverage WSJ's upscale demographics in any number of social media-oriented efforts, as well as to offer financial analysis tools that would one-up offerings made available by Yahoo! Finance as well as premium offerings from Morningstar and other online suppliers. Whatever the changes they need to be oriented more towards a younger generation's needs if they are to use subscription revenues for anything more than the temporary bulwark that the TimesSelect premium experiment turned out to be.

Any way you look at it it's not clear that there's a core of traditional editorial content from any news publisher that's likely to sustain growth in online subscriptions in the long run. The tricky job that Dow Jones has on its hands is to project the value of its brand more globally via ad-only content whilst maintaining some sense of value in its exclusive subscription product. Dow Jones has much to gain in retaining its subscription model as it expands ad-only content, but they will be challenged to keep the value of the Wall Street Journal brand high unless there are new styles of content that can build on the existing brand's loyalty.

Labels: advertising, Dow Jones, Monetization, Murdoch, subscription

Mercifully the carnival that has been the negotiations for News Corporation's acquisition of Dow Jones appears to have pulled out of town, with factions of the Bancroft family finally wrestled into line with the financial and managerial realities of the deal. One shudders to think as to whether any right-thinking corporation would have considered an acquisition of Dow Jones any time soon after these machinations, so from at least that perspective the shareholders of Dow Jones should consider themselves very lucky indeed. But now that the glow of the spotlight is beginning to die down from this fracas, what's really going to happen with Murdoch's new acquisition?

As we said more than two months ago the benefits of having a global media company as a parent that has strengths in markets where Dow Jones needs to become stronger are the key to the real value in this deal. Murdoch's desire to have a major U.S. gem like Dow Jones in his crown will be overshadowed ultimately by his use of Dow Jones as an international brand that will allow him to become a more dominant player in influencing world markets. This will be especially important in U.K. Asian and Australian markets, where the online expertise and editorial strengths of Dow Jones can be used to build an English language global business media brand more able to dominate regional brands and Pearson's struggling Financial Times.
But it's also likely that the Dow Jones brand will be able to find footholds in other markets over times with Murdoch's leverage.

The missing piece from this empire is a strong presence in real-time trading markets. But given the cutthroat nature of those technology-driven markets that are not easily adapted to the managerial strengths of the Dow Jones organization this may be an omission worth skipping for the time being. As financial markets split into highly automated trading venues and opportunities driven by high-end market analysis tools the opportunity for Dow Jones to make better use of its strengths is not likely to solidify for some time in the wake of Thomson's pending deal for Reuters. A conjectural bid for Bloomberg is not really even worth considering at this point, though in two years' time it might be a reasonable play for NewsCorp if Murdoch's focus on succession takes his portfolio into more diversified channels.

While there is doubtless a fair amount of sadness in some hearts at Dow Jones as a proudly American brand passes to offshore ownership it's also an opportunity to reflect on the need for American business media in general to become more adept at managing international footprints. A weak dollar makes this a difficult time to buy in to those markets, so the wave of international acquisitions of U.S. targets this year at favorable exchange rates makes it that much harder for U.S. B2B media companies to make progress in overseas markets. But times will change - if B2B media companies take on a Murdoch-like view of the world that goes beyond the local golf courses and into more international circles of power. In the meantime congratulations to everyone involved in the Dow Jones deal - I hope that you get a few days off to forget about it all.

Labels: Business Information, Deals Partnerships and Sales, Dow Jones, Murdoch, News Corp

Two weeks ago when we covered the offer by Rupert Murdoch to have NewsCorp take over ownership of Dow Jones there was plenty of froth from the Bancrofts and some media pundits that this was a "no way" proposition, making us just a little nervous about our bullishness on the deal. Two weeks later the Bancroft family has issued their own press release independent of Dow Jones to indicate their intent to provide Dow Jones with new ownership and that they are willing to speak with News Corp as a potential suitor. Murdoch's patience and low-key approach seem to have brought him at least to a place at the table, if not one fully welcomed, as the Bancrofts seem to have concurred with our earlier conclusion that this is the right time to make a sale. While there is always the potential for a surprise bid from the wings it's probable that whatever solicitations the Bancrofts initiate for alternative offers will be more to provide emotional and intellectual backing to the very likely consummation of a deal with News Corp. Investor's Business Daily noted earlier regarding this deal the ancient Chinese military strategist Sun Tzu's writing that exercising patience often leads to victory in war. Perhaps the patience of both the Bancrofts and Murdoch are about to be rewarded with equal measure.

Labels: Bancrofts, Deals Partnerships and Sales, Dow Jones, Murdoch, News Corp