CAMPAIGN INTERNATIONAL: MEDIA-OWNER PROFILE - Dow looking good on paper but TV is a tougher prospect

One of the most powerful global media companies has to learn new skills, Alasdair Reid reports.

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

business community.’

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.


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

database services.


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).