Ken Marlin, Principal of Marlin & Associates, noted in his introductory remarks that media companies moving magazine content to the Web are kind of still not "getting it," but that Richard Zannino is certainly not one of those people. Richard is the first non-journalist to be running Dow Jones since the 1930's, and brings a fresh look at simultaneous challenges. Return to shareholders was decent but being left in the wake by holding companies for the Washington Post and facing a crisis in confidence in management. Zannino saw the solution as making an "uber" WSJ brand that would bring together its assets in a more valuable and tightly integrated mix. By focusing away from channel delivery to audiences and their needs and putting together the team of Gordon Crovitz for editorial products and Clare Hart for enterprise products Richard has, Ken noted, put words of change into effective action. Dow Jones stock has held firm in hard times for news titles lately as others such as The New York Times have dipped.

Richard reflected on how a 125 year-old icon becomes a 21st century company. "It's wonderful for our customers, but wreaking havoc on traditional media business models," Richard noted. The acceleration of models changing under the influence of Google in online and now enterprise environments is creating a powerful Trojan Horse for traditional media player's strongholds. The number one "frienemy" expanded its footprint with YouTube, illustrating the power of both new media channels and the new role of these channels for providing breaking news. As iPod evolved from a music player to a media player for all types of content (read: iPhone) more disruption is coming from technology players than ever before. New competition is exacerbated by the move to younger audiences using mobile platforms. At the end of the day there are "digital nickels" left over for traditional media companies to consider.

Wherefore Dow Jones, still heavily reliant on print ad revenues? "Concerned, yes," Richard noted, but he looks at this new world through an optimistic - and profitable - lens. Online's growth at a 20 percent rate on the top and bottom line doesn't hurt that outlook, to be sure, with new delivery formats offering new opportunities (note - not threats) for monetization. A trusted brand with a commitment to quality is still going to serve its clients, he notes, especially since without quality content towards which to point search engines they're not of much use. Still, content must be tailored to their needs and adapted to their workflows in personal and enterprise markets. Factiva is the leader for Dow Jones in this arena, with awards for innovation and a powerful mix of content, tools and expertise to help clients get great value.

Dow Jones is not agnostic about channels that they select, "we're greedy," notes Richard. Indispensable content must be repositioned to turn technological threats into opportunities - a task that requires new thinking, many who are worried more about their iconic status than their markets. "Surely some icons will vanish," Richard notes, wanting to face up to the realities and exploiting their strengths in a changing marketplace. Long term, Dow Jones is moving away from heavy print revenues to more diversified streams. In 2006, print was 70 percent, in 2007 it will be 60 percent, and targeting 50 percent in the future by growing electronic revenues while maintaining print revenues. Today all channels of distribution are integrated within their divisions, allowing Dow Jones to execute on their business plan more efficiently. Consumer advertising is being bolstered with weekend editions (theme: print is a weekend treat) and looked at ways to attack print more effectively with a new print version that complements the online site more effectively.

Richard shifted to a video clip of TV personality David Letterman discussing the future of newspapers and their cutbacks. The Journal was noted by Letterman as the "widest" paper, which "bit them in the ass," prompting the new "bad boy" Journal edition - and a mockup finger-sized edition of The New York Times as their response to the WSJ's moves.
Back to Richard, they've eliminated 20 percent of their cost basis for print, exiting all non-core businesses - a strategy that seems to be working. EPS increase was about 13 percent as a result, with flat stock prices offset by increased shareholder return. Last week's street guidance predicted 18-20 percent return increase based on Factiva increases [COMMENT - We'll see, the product is aligned well but it's a rapidly shifting market heading into a rough enterprise economy in late 2007].

Richard is on it, no doubt, taking the sleepy corners of Dow Jones' holdings and sweeping them out in preparation for total war to ensure a strong position in the content industry. Strong moves at a critical time - though there are holes yet to be filled. With a unique online community Dow Jones has been slow to exploit it with social media and it has further exposures on core news that may be hard to offset altogether by trying to move Dow Jones coverage higher in the food chain into market analysis. It's a crowded and tricky marketplace, but as Richards notes, the opportunity to mix both full-scale enterprise subscription models and strong consumer revenues effectively. This contrasts to Thomson which jettisoned its media presences and Reuters which licenses consumer content and drives ads to it in its online portal but has no consumer-oriented subscription products. It's a good position to be in these days. But I think that it will be interesting to see how Reed Elsevier begins to build a more merged model between content normally licensed for enterprise use and media markets. The key opportunities in 2007 and 2008 will be to blur the lines between enterprise and media models more effectively, drawing subscription, ad and licensed revenues in a more dynamic mix that allows content to meet audiences' needs more quickly than ever before. In the meantime, Dow Jones has gone from a shaky band of pieces with an iffy future to a band of bothers and sisters ready for combat in today's content wars.