Dow Jones Recognizing It Needs To Keep Diversifying Away From Newsprint

from the where-the-world-is-headed dept

It's no secret that many in the newspaper business have struggled with figuring out how to adapt their business models into the digital age. That's unfortunate, but not too surprising. Dow Jones has had its own struggles in this area, at times making its own publication less relevant by locking up the content... and then complaining that its competitors weren't doing the same. However, lately, it appears that the company is really making a big effort to be more relevant. It's been opening up more and more content as well as experimenting with new and different offerings. Thus, it's not a huge surprise to hear Dow Jones' CEO say that the company's goal is to have less than half of its revenue coming from traditional print operations by 2009. Of course, there are two ways to look at this. If you want to view it positively, it's a publisher recognizing that the times are changing and it needs to adapt to those times and stop trying to protect a cash cow who's getting squeezed. However, on the flip side, this seems to be focusing on the wrong thing. The goal shouldn't be to focus on what percentage of revenue comes from what channel -- but on how to deliver the best overall product that helps maximize revenue.

Think of it this way (and I'll simply make up numbers for simplification in the illustration): In scenario A, the publication makes $60 million off its print operations and $40 million off the rest of the business. In scenario B, the publication makes $40 million off the print operations and another $40 million off of the rest of the business. Scenario A is clearly superior, but if the goal the company is focusing on is making sure that print operations are less than half the revenue for the company, then scenario B is what you target -- even if it makes the company worse off. That's not to say that diversification is bad, especially in a rapidly changing market. But if you're going to diversify, the strategy should be on maximizing revenue and mitigating some levels of risk through diversification, rather than just diversification for the sake of diversification.
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  • identicon
    Ajax 4Hire, 20 Apr 2007 @ 11:41am

    Dad, what's a newspaper?

    Its selected internet news and advertising printed up and delivered to your house every morning or evening.

    You don't get to choose what is printed and you don't get to choose which sections or news is presented first and you are only limited to the comics that they decide for you.

    link to this | view in chronology ]

  • identicon
    Mike, 20 Apr 2007 @ 12:18pm

    they're not rookies at the whole 'business' thing

    They've set their goals because they've analyzed their marketplace and feel that the specific mix they are targeting gives them the right balance between short and long term revenues and risks. In other words, they started by asking "How can we best maximize our revenue?" and then arrive at "We need to be focused on electronic content by 2009." they report the second statement, but it isn't because they didn't consider the first.

    link to this | view in chronology ]

  • identicon
    Bhagat, 8 May 2007 @ 11:09am

    Dow Jones online push

    I think your perspective is right on. We see people getting so caught up in the online "vision" that they lose site of the goal. The same for marketing, we shouldn't focus on moving more media dollars to online because that's the future, but rather the right mix of vehicles and properties to drive effective and relevant communications.

    link to this | view in chronology ]


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