Weekend (or weakened?) Journal
The option is not available to most newspaper chains, which already publish seven days at their major properties. But it was available to Dow Jones, and, by golly, they took it.
So, we now have the new Weekend Edition of the Wall Street Journal, where the usual tales of financial buccaneering and corporate intrigue are juxtaposed with articles about foie gras milkshakes, “comfy shoes” for guys and “bicycles built for her.”
The Weekend Edition is at once an obvious strategy and a tremendous risk for Dow Jones.
It is obvious, because the company needs to do something to shore up advertising revenues that sagged 6.3% in the first six months of this year vs. an average industry gain of nearly 3%. Technology advertising, which peaked with the Bubble in 2001, has fallen more than 19% a year for two years straight. Financial advertising this year dropped nearly 20%. These categories historically have been the bread-and-butter advertisers for the bulls-and-bears Bible.
The Weekend Edition is a courageous, if perhaps irrationally exuberant, attempt to tap new sources of advertising for a publication that seems to have tapped out its traditional advertising base. By switching the emphasis on Saturday from T-bills to meat thermometers, the Journal hopes to recruit a new class of upscale brands and retailers hoping to reach its enviable, upscale audience.
The industry buzz is that the Journal has gotten some 100 advertisers to commit to schedules in the new Weekend Edition. The question is whether this is net new business, or simply lineage shifted from the daily paper to the new edition. It also remains to be seen how long the schedules will last. And that depends directly on how many $85 meat thermometers people will buy.
Adding a day and tweaking the content to entice new advertisers is logically consistent. But there’s a big oops. And it is this:
Although readers rightfully value the Journal for its hard-nosed, hard-news reporting, the Weekend Edition violates their expectations with silly articles on “eco-friendly” leaf blowers and discount-frock shopping.
To the degree journal readers want to know about foie-gras frappes and leaf blowers, they already subscribe to other publications that satisfy those needs more authoritatively than the superficial knock-offs in the Weekend Edition.
Perhaps the pain of subverting the Journal is what led the founding editor of the Weekend Edition to jump ship less than a month before launch. The highly regarded Joanne Lipman joined Conde Nast in August to start a new monthly business magazine. Given the aforementioned weakness in financial and tech advertising, that seems like another Mission Impossible. But that’s a story for another day.
You can’t blame Dow Jones for starting the Weekend Edition in hopes of putting some life into a stock that was foundering until the report last month that some members of the controlling Bancroft family might like to see the company sold. Although the stock is trading around $40 a share – about $8 above its 52-week low – the company needs to get fixed before it is sold, if ever it will be.
Apart from the danger of befuddling traditional Journal readers, the management of Dow Jones has a lot at risk in the Weekend Edition.
Round numbers, I estimate it will cost about $1 million per week in payroll, paper and delivery expenses to learn if the Weekend Edition has legs. There will be additional costs for promotion and ad sales, including hiring the guy who staged the opening and closing spectacles at the Olympics to run “launch experiences” in Atlanta, Boston, Chicago, Dallas, Detroit, Los Angeles, Minneapolis, New York, Philadelphia, San Francisco and Washington, D.C.
If the Weekend Edition successfully boosts over-all revenues beyond the costs involved in producing and delivering 1.75 million additional newspapers per week, then it will be a win.
If the Weekend Edition flops, there not only will be a major loss of money and face at Dow Jones, but potentially a major loss of employment in the household of Peter R. Kann and Karen Elliott House, the husband-wife team who respectively are the CEO of Dow Jones and publisher of the Wall Street Journal.
Now that the great experiment has been launched, all we can do is sit back and wait to see whether the Weekend Edition has strengthened, or weakened, the Journal.
If you crave insightful business and financial reporting over the weekend, however, grab a copy of Barron's.