One of the most powerful global media companies has to learn new
skills, Alasdair Reid reports.
Dow Jones is perhaps the ultimate blue-chip media company - as reliable
and venerated as the corporations and financial institutions whose
activities it has charted for more than a century. Like the Financial
Times in London and Nikkei in Tokyo, it is synonymous with the trading
index in one of the world’s three main market time zones. The Dow Jones
Industrial Average was 100 years old last year.
Its best-known brand is, of course, the Wall Street Journal but it is by
no means obsessed with the US market. Unlike the FT and Nikkei, it has
been successful in expanding beyond its time zone. In fact, it can claim
to have been the world’s first truly global media owner - proving,
perhaps, that money is the world’s first and foremost common language.
It launched the Asian Wall Street Journal in 1976 and its European
sister in 1983. According to the latest financial results, around 30 per
cent of revenues and 40 per cent of profits came from outside the
The Wall Street Journal can lay claim to being the world’s pre-eminent
financial newspaper, with a total readership across the three titles of
more than four million. The cornerstone of the company’s strategy is to
continue to leverage the brand worldwide. In tandem with its marketing
activities on the titles themselves, it runs a syndication service,
providing Wall Street Journal-branded pages for national newspapers
around the world.
In the US, it has a substantial portfolio of business and finance
titles, including Barron’s and SmartMoney. In Asia its influential Far
Eastern Economic Review is the region’s leading English language news
In 1991 it took a stake in the top German financial daily, Handelsblatt,
and it also owns 50 per cent of AmericaEconomica, a Spanish language
business magazine serving Latin America.
These titles give Dow a significant share of the world’s business and
financial print market - but room for expansion in this hotly contested
niche sector is limited. The company’s biggest challenge is to diversify
into new media, particularly TV.
It is proving troublesome. In 1993, it became a joint venture partner in
the launch of Asia Business News. In 1995, it followed that up with the
launch of European Business News, in which it has a 70 per cent share,
with Flextech owning the remaining 30 per cent. In the same year, a
50/50 joint venture company formed with ITT paid dollars 207 million to
acquire a local New York station, WNY Channel 31. This has been
relaunched as WBIS+, running business news and market coverage through
the day and live sports events at night and at the weekend. WBIS+
started with a network of six million homes, but the company has plans
to roll it out nationwide.
The long-term strategy is obvious - to duplicate the three time zone
world presence of the Wall Street Journal on TV. But ABN and EBN are
proving to be a drain on resources.
In 1995, ABN and EBN cost Dow a combined total of dollars 38 million.
EBN alone lost dollars 10 million in the first half of 1996, prompting
Flextech to seek crisis talks with Dow management. There was speculation
that EBN would seek a merger with its closest rival in Europe, CNBC,
which is owned by the mammoth NBC organisation.
Dow sources dismissed these rumours and set about revamping the station
last autumn. It has now been repositioned to include lifestyle
programming ’designed to appeal to the businessman in everyone’.
Executives at rival CNBC called this a climb-down - they argued that for
the first time in its history, Dow Jones had moved away from the purity
of its focus on business and finance, thus diluting its brand. Maybe
that’s the point though - to survive in the television market it needs
to learn new skills.
And EBN does have a mountain to climb. Ratings for many mainstream
satellite channels are often too small for audience measurement panels
to pick up and the problem is multiplied 100 times for a highly
specialised niche channel. And if you don’t have measurable ratings,
advertisers are hard to attract.
It also happens to be an extremely hotly contested sector, with BBC
World and CNN International also in the fray with EBN and CNBC. Dow
Jones is putting its money on the belief that it is easier for a
financial information specialist to learn about TV than it is for TV
companies to gain credibility in business news.
The Dow Jones chairman, Peter Kann, obviously believes that content is
king. As he put it last year: ’We are not a media conglomerate, nor an
entertainment company. We stick to our business of business, providing
information to an ever-expanding and increasingly connected worldwide
But Kann is now swimming with the sharks. Worse, he has to contend with
a minor revolt among his shareholders, some of whom object to plans to
sink dollars 650 million into Dow’s ailing Telerate arm. Not all is bad
news, however. The two new shareholders spearheading the rebellion are
well-known around Wall Street for putting fire into the bellies of
unfocused or sluggish conglomerates. The result could be an even leaner
and meaner Dow Jones in the future.
DOW JONES: THE FACTS
Revenues in the year to 31 December 1996: dollars 2.48 billion. Media
revenue - from advertising, cover price sales and subscriptions -
accounts for just over half (dollars 1.4 billion) of this total. The
remainder comes from online financial trading systems and market
WORLDWIDE MEDIA ASSETS
USA The Wall Street Journal; National Business Employment Weekly
(careers news and job ads); the Wall Street Journal Classroom Edition;
Barron’s (weekly magazine of investment news); American Demographics
(monthly magazine covering population trends); Dow Jones Financial
Publishing Group (a stable of trade magazines for financial
professionals); SmartMoney (personal finance magazine, jointly owned
with Hearst); Ottaway Newspapers (a network of 19 local daily
newspapers); WBIS+ (50 per cent-owned business and sports television
Television interests also include a programme production company
providing business news for syndication; Business Information Services
(includes the Wall Street Journal Interactive Edition and information
database systems); Financial Information Services (real-time market
information systems, including Dow Jones Telerate, an online service
covering all major financial markets, and APDow Jones, a joint venture
with Associated Press).
The Wall Street Journal Europe; European Business News (70 per cent
The Asian Wall Street Journal; the Asian Wall Street Journal Weekly; Far
Eastern Economic Review; Asia Business News (42 per cent stake); Asian
Equities Report (online data on Asian market trading).