Podcast: The future of newspapers

Media titan Rupert Murdoch has finally succeeded in buying the company that owns the venerable Wall Street Journal. Now media experts are wondering what's next, not only for the Journal, but also for newspapers in general. Here to comment is Andrew Leckey, director of the Donald W. Reynolds National Center for Business Journalism and investment columnist for the Chicago Tribune.

Media titan Rupert Murdoch has finally succeeded in buying the company that owns the venerable Wall Street Journal. Now media experts are wondering what's next, not only for the Journal, but also for newspapers in general. Here to comment is Andrew Leckey, director of the Donald W. Reynolds National Center for Business Journalism and investment columnist for the Chicago Tribune.

Transcript:

Knowledge: Billionaire media titan Rupert Murdoch has finally succeeded in his efforts to buy the company that owns the venerable Wall Street Journal. When Murdoch first announced his plans, the news jolted the media industry. And, now, with the deal complete, industry experts are wondering what the future holds, not just for The Wall Street Journal specifically, but also for newspapers in general.

Here with his thoughts on the deal is Andrew Leckey, director of the Donald W. Reynolds National Center for Business Journalism, at the Walter Cronkite School of Journalism and Communication. He is also a longtime syndicated investment columnist for The Chicago Tribune and a former CNBC anchor.

Many newspapers originally based their high-tech business models on offering content for free. They eventually started charging online; and that obviously hasn't worked out, as we found out with The New York Times just this week. Why hasn't that been working in the newspaper industry?

Andrew Leckey: The problem for the newspaper industry is that, when you start to sell a product in that way, you really have to get the reader used to the possibility of getting it in that way. The Wall Street Journal has certain proprietary information that people want to get a hold of. Now, you follow that business model to Bloomberg News — where you pay for the content you get, you get a machine, you do all of this — that's totally proprietary.

But, in the case of The Wall Street Journal, there are additional stories and information that you can pick up that are very helpful. The problem with the general newspaper is (1) the readers aren't used to it, and (2), until you really ween away from the print product, it's unlikely that people are going to start paying for the other product.

It's sort of an in-between state right now, sort of a netherland, where there's no particular tie one way or another. But the reason people are going to pay for The Wall Street Journal's information is that they trust it and they also know that it's always going to be there and it's going to be accurate.

Knowledge: And, on top of that, there's the added value that, I guess, some subscribers don't feel they get with, say, The Washington Post or The New York Times or CNN's pipeline.

Leckey: The strength of The Wall Street Journal is that it has more reporters than anyone else. To be a good newsroom, the more people you have, the better - because, then, you can have people focus on specific companies, on specific industries, on particular aspects of the economy. It's a people business.

The more people you have doing it, the better. And The Wall Street Journal is just simply able to have more people covering business than anyone else. No-one can compete with them on business, to be sure. And, also, if you get into the areas of The Washington Post or The New York Times or L.A. Times, they're dealing with a lot of national politics and other things that you can get in a lot of other places.

In terms of The Wall Street Journal's information: there's The Financial Times, you might see; you can also go online for a variety of different sources of information; but The Wall Street Journal is something very special, and it has been since its very beginning.

Knowledge: How do you think - or do you think - the look will change under Rupert Murdoch? Or is the newspaper that we see today pretty much what we're going to be seeing a year from now?

Leckey: I don't think any newspaper that you see today is going to be pretty much what it's going to be like a year, two years, or five years from now. Part of it is the convergence of various technologies. And certainly the online product is going to be growing immensely. The strength of the Bancroft family when they were the primary owners of The Wall Street Journal, was that they left the editorial product alone.

The downside of that was that they didn't expand as much as they could have into a variety of other areas. And therefore Bloomberg News, CNBC, therefore a lot of other rivals, including MarketWatch, which they eventually bought - all of these companies sprouted up because The Wall Street Journal stuck in a sort of curmudgeonly charming way, to their strict type of photoless, illustrationless emphasis.

Now, in recent years, they've had to change this. And it's the situation in which, once you go over the wall, you have to keep doing it. They've certainly tried with a lot of illustrations and things with their weekend editions and a variety of other things. What Murdoch seems interested in doing is probably broadening the base to have other folks reading it.

He says he's going to add more politics and a number of other coverage areas, which will go head to head with such papers as The New York Times and The Washington Post. So it'll be interesting to see, in that way, how it changes. If he does that, it really is going to change significantly the look of it. He's also had sort of a penchant for having large personalities at times.

He likes having that in there. Currently, you find a very conservative bent in the editorial page. However, you might see the type of people who are spouting various types of political polemics elsewhere in the paper in The Wall Street Journal. So I guess that's what people will be watching for.

Knowledge: One of the things that were brought up immediately because of this was that Murdoch wanted The Wall Street Journal to be an adjunct, part of a synergy with this new Fox business channel. Yet, The Wall Street Journal has a contract 'til 2012 with CNBC to be the provider of exclusive content. Do you see Rupert Murdoch in any way trying to break that, or is it pretty airtight, or does it benefit him to have his hands in both those pies?

Leckey: Well, CNBC — I had the opportunity to work for five years for CNBC when it was at the height of the market a few years ago. CNBC lost a lot of viewers when the market stopped performing as it had. And it has built up lately, gained a lot more momentum; and that's why Murdoch is entering that market right now.

There is a synergy. But, you know, he's been able to wait things out if necessary. That's quite a while, and the man is in his late 70s — mid to late 70s; so it isn't like — I don't believe he's going to live forever, and that also means that he's also less patient than he might be. It's always difficult when you have a relationship that is going to end at a certain point but you still have to keep working together.

If he was able to work his way around the Bancroft family, I have no reason to think he won't be able to work his way around this relationship as well — that being The Wall Street Journal and CNBC. That isn't as tight a relationship as one might imagine. And I think that probably it will be the color of money that makes the difference in it.

But it could make for a very awkward situation otherwise. But I think that the synergies that you see with Rupert Murdoch — how publications in the future are going to change is that the print publication of any company won't be quite as important as it once was and the online is likely to grow. With Rupert Murdoch, you add the potential for satellite coverage of news, and you add the potential for more online.

A problem with The Wall Street Journal is that it's mostly a U.S. publication. Now, it has a European edition and has an Asian edition; but those are relatively small. And it has never had the scope of, let's say, a Financial Times or Bloomberg or some of the others. So, I guess, with Murdoch, there is the potential to turn The Wall Street Journal into more of a global entity.

But that specific print product was likely to change no matter what. Also, how many people you have working on your print product is likely to change as well. I use the example that, last year, The Wall Street Journal, in cost-cutting, did away with all of its Canadian bureaux.

Now, if that happens next year, everybody says "See? Murdoch's cutting back the print product." But you're seeing that happening throughout the industry. So he's coming in at a tricky time — although it's an opportune time, because he can do better with it at this point. It's always tough to buy a publication when it's at the top of its game.

And, while it may be editorially at the top of its game, it isn't in terms of profits. So this is an interesting time — a transition to more online, to more broadcast, even to podcast. All these sorts of things are new aspects that detract, in the long run, from the print product. We'll have to see how that all plays out.