The Wall Street Towel

Posted Jan 2nd 2007 9:10AM by Peter Cohan

This morning the latest version of the Wall Street Journal landed in my driveway. The first thing that struck me is that it's about as wide as a Holiday Inn bath towel.

Ever since the dot-com bust, newspapers have been complaining about how their advertising revenues are down along with increased competition from the Internet. In response, the Journal has added color -- both literally and figuratively -- through its Personal Journal and its Weekend Edition. To its credit, the Journal has also introduced an online version which I pay for -- as have hundreds of thousands of others.

But all that innovation has not been enough. In the last five years, Dow Jones & Company, Inc. (NYSE: DJ) has seen its revenues decline at a 4.3% annual rate and it sports a thin 7.7% profit margin. So the Journal has decided to cut the width of the newspaper -- and to promote it Dow Jones is giving away 500,000 copies for free. Today's edition has a special section introducing itself to readers. ~~But I couldn't find any estimate of how much~~ The new towel-width will reduce the cost of producing and shipping the newspaper by $18 million.

I'll keep reading the Journal but if they want to save money, I think they should scrap all the stock tables -- timely information is available online -- and eliminate its editorial section. Anyone needing the views expressed there can tune into Fox for free.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He subscribes to the Wall Street Journal but doesn't have any financial interest in Dow Jones securities.

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Reader Comments (Page 1 of 1)

1-02-2007 @ 10:00AM

dean watts said...

The WSJ is now a (bad) joke... It's wall to wall, full page advertising. It's no wonder this rag is going down in flames. And, I'll be one of the first to cancel my subscription.

1-02-2007 @ 1:02PM

Jorthundus said...

I hate the gradual slide from prominence to survival that inevitably appears in newspapers. I also can't stand the spin which inevitably accompanies the slide.

No, it's not about 'easier access'; it's not about 'better organization'; it's not about 'more features that the readers requested'. Bottom line: it's about the fact that the WSJ, like all newspapers, is getting torn to shreds by new media and a general declining interest.

Nevertheless, I believe that the newsprint market will eventually stabilize, with a bifurcation: there will be a good number of low end, youth oriented, ad-filled 'short' papers -- often available for free. (E.g. the short papers launched by both the Chicago Tribune and the Chicago Sun Times)

On the other hand, there will also be a move toward the 'upper stratosphere' -- increased prices, more indepth coverage, more 'star' reporters, and better access to high-level information and informers. Somewhat of a synthesis of the current top crop of papers (FT, ?WSJ?, NYT) and the best weeklies (Economist is the first that comes to mind).

Now, the papers that end up in that second group will be the ones with the balls to endure the harsh market forces that are going to only intensify during the old media --> new media transition period.

The WSJ does not, unfortunately, seem to be one of those papers. For all the BS spin, they've done their readers a disservice by cutting content. They've done their readers an offense by subsequently trying to wrap the cut content in a prettier package and calling it 'new and improved'.

I'm waiting for the first analysis that identifies exactly how much 'print space' has been lost by this change. I'm also fairly confident that that same analysis will find a much higher percentage of the paper devoted to ad space. This change cries of desperation, not innovation.