ChasNote

21 June 2005

Wall Street Journal's Prolonged Slump

In September the Wall Street Journal will launch Weekend Edition, a Saturday version of its daily paper. According to rival NY Times (reg required), "The goal is to attract a more diverse base of advertising to pull The Journal out of its prolonged slump."

The chart that accompanies the article, with data from JP Morgan, shows that The Journal's print-advertising revenue for the most recent fifteen fiscal quarters is still below levels set back in pre-bubble 1998. Goldman Sachs analyst Peter Appert wonders "if the decision to pursue the Saturday edition isn't a tacit acknowledgement that their core franchise is challenged, that the base business is less attractive than it used to be." Mike Neiss, SVP and managing director at Universal McCann, is more direct: "this is an experiment in recycling." And even with average daily circulation down 2.3% from last year, to 1,750,400, that's a lot of recycling.

In the meantime, Dow Jones has signed up 320,000 paid subscribers to WSJ.com and spent $538 million to expand their online presence with the acquisition of MarketWatch--two strong indicators that the gang at The Journal isn't oblivious to the changing patterns in news readership.

So I'm baffled by their renewed investment in print. Given declining circulation, revenue and relevance for traditional newspapers--even for titanic brands like The Journal--Weekend Edition strikes me as a harebrained idea. But with an estimated net operating loss of only $12.5 million this year (it launches September 17), the optimists among you may argue that at least it's an inexpensive mistake.

(All quotes above were lifted directly from the NY Times article.)

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