Content Matters

Dow Jones CEO Rich Zannino was the lunchtime keynote speaker Tuesday at SIIA.

Coming less than a year after Dow Jones' reorganization, it was an interesting opportunity to hear how the changes are taking shape and what he sees in the coming years.  To set the agenda, Zannino talked about the forces impacting the news and content industry.

Transformation Accelerators like Google and Apple are changing the industry.  Martin Sorrell refers to these companies as "Frenemies".  While Google has an obvious impact, Apple has had huge impact.  The iPod has moved from a music player to a player for information; now the new iPhone will deliver music, news and information.

The convergence of technology and content has led to many new competitors to traditional media players. usage is shifting to online and mobile, especially for young users.  As Warren Buffett said, "old readers heading to cemetery while young readers head off to college."

Traditional media markets are clearly shrinking with declining profit margins.

So, what then....

Dow Jones sees opportunities in this.  While digital distribution of content is on the rise, not a zero sum game.  Total consumption of media is growing.  Online market is fastest growing (20% growth and 20% net margins).  Global information services is still growing at 8% with 17% margins.

In this time of information overload, the need for trusted information has never been greater.  For Dow Jones, the trusted brands and authoritative content help customers find what they need.  However, Dow Jones needs to make information tailored to the user's needs and available within their workflow.  Factiva is more than content - it's content, tools and visualization put in front of professionals, to find what they need, when and where they need it.

According to Zannino, going forward, the Company wants to "superserve" customers to have them use Dow Jones content across all channels throughout the day.

For iconic media companies like Dow Jones to adapt to the new environment, they will have to make huge changes in the way that they do business. Not every traditional media company will try to adapt, and others will try and fail. 

For Dow Jones, the long term strategy is straightforward:
Transform from a company heavily dependent on print revenue to a diversified company where users access Dow Jones information across multiple channels.
In 2006, 70% of DJ revenues were from print advertising.  For 2007, they project print below 60% and their ultimate goal is to get it below 50%.

After their reorganization, they have fully integrated all channels into the core brands. 

Last year, Dow Jones invested about a billion dollars in the Company.  They launched Weekend Journal and increased their color printing of the Journal, to make Dow Jones more accessible to consumer advertisers.  Spent $500M to acquire Marketwatch which tripled online visitors and doubled online ad revenues.  With the newly integrated Factiva and MarketWatch, Dow Jones is well-positioned to integrate content across multiple channels to reach multiple markets.