Business is cyclical. Innovation changes environments and, unintentionally, destroys profitable status quos. When that happens stronger and more innovative firms pounce to buy up the assets of weaker firms and maintain their competitive advantage.
Customers and society win as inefficient products are removed from the market and the base standard rises. There are losers, of course, but the overall benefit to society is vast. This capacity to slough away dead tissue and rebirth itself is what terrifies most people about business. And one of our greatest businessmen, with an astonishing capacity for renewal, is Rupert Murdoch.
End of the Print Era
The newspaper industry is in a period of trouble and strife. Editors’ lock on opinion and breaking news has been degrading for a generation. How can a system of physical printing and distribution beat the ability of 24-hour network television news, digital radio and the army of independent Internet bloggers to break stories? How can journalists offer top-notch analysis when the most highly qualified business, technology, political and social analysts all run their own blogs, podcasts and radio stations? How can newspapers compete with the visual delight possible on television and the Internet? How can they encourage participation that compares to the interactivity of blogging or talk-radio?
Advertisers have taken note and followed their consumers. Newspapers around the world have suffered. And, despite the protests of politicians seeing their favourite mouthpieces undermined, newspapers have huddled together for mutual support and commiseration.
Except for Rupert. The Murdoch media empire does make money. It’s astonishingly profitable. News Corporation is even, as Murdoch was quick to point out when the Bancroft family protested his corporate ambitions, a family business. And now he finally has his prize: Dow Jones and The Wall Street Journal.
The Fear of Consolidation
Many have expressed fear about his ambitions. Senator Chris Dodd, Democrat presidential candidate, sums them up: “I am deeply troubled by the incredible amount of consolidation occurring across the American media landscape. The power of the media is swiftly being limited to a few controlling hands, which poses a serious threat to our democracy. The foundation of our democracy rests in our ability to hear from a diverse array of sources so that we can make informed decisions. The Wall Street Journal has provided a valuable and important news choice to the American public for years.
“With News Corp’s purchase of the newspaper, I am concerned that it will be very difficult for the Journal to offer fair and balanced reporting under the pressures of a giant-media conglomerate.”
Which is bullshit and a contradiction. If The Wall Street Journal is under so much threat from other forms of competition (the Internet, radio and television, as well as other publications) then it is difficult to justify a complaint based on Murdoch reducing balanced reporting and the availability of platforms for independent voices. One newspaper more or less isn’t going to change the availability of free speech. And, without a cash injection, there may be no Wall Street Journal within a decade.
The Beginning of Renewed Competition
As for The Wall Street Journal … has anyone read it recently? It’s a disaster. It’s boring, dense, hard to read and badly laid out. It looks like they’re using the same typesetter from 1902 when Clarence Barron bought it before passing on the shares to his stepdaughter, Jane Bancroft. Even their website is boring.
In comparison to The Economist, owned by the Pearson Group, and first published in 1843, The Wall Street Journal is seriously behind and losing ground. Yet, in their analysis, The Economist says that Murdoch has paid probably US$ 2 billion too much for the newspaper and that, just this once, Murdoch has put his passion for owning such a prestigious newspaper ahead of profits. The Wall Street Journal’s most significant competitor is The Financial Times, also owned by Pearson and another potential suitor for Dow Jones.
Murdoch has wanted Dow Jones for a long time. Do people seriously think that this consummate businessman is going to turn The Wall Street Journal into a Sun-style tabloid? With pictures of titties on Page 3? Where is the business sense in that? Murdoch wants to own a premium and respected business newspaper. He isn’t going to achieve that by pushing a tabloid-style agenda.
Unless, of course, you think that the people who currently buy The Wall Street Journal are amongst the thickest and least informed people in the world and won’t notice if their newspaper stops discussing Sarbanes-Oxley and the equities plummet in favour of nude pictures of Britney Spears?
Bring it on. I can’t wait. Murdoch is a genius and I am keen to see how his vision transforms The Wall Street Journal into the best business newspaper that we all know it has the potential to be.