Monday, April 26, 2010

Murdoch's WSJ strategy for take on Times an old fashioned approach to competing locally

Want to go after a market outside your domaine? Create a regional section. Want to pressure the competition? Drop your prices. These are old, old methods, but what would you expect from the old tabloid king?

Rupert Murdoch's effort to cut the legs out from under the New York Times by going after the local market  offers few new ideas, though that does not mean the effort won't show results. It is very old school to believe that adding a regional section to a paper will attract readers -- the technique has been done of ages, usually with poor results.

The online version of the WSJ's Greater New York section.

Whether it is the LA Times creating an Orange County or Valley edition, or Newsday creating a Manhattan edition, the attempt by publishers to broaden their reach and appeal to new regions usually fails as readers realize they are being pandered to. But Murdoch's WSJ has an advantage that it is already part of the city. Especially for those who work in the financial industries, a WSJ with added local content is a good reason to not pick up the Daily News or Post. But is it a good reason not to read the Times? A will losing a few local single copy sales really make a difference in the make-up of the New York newspapers market?

A look at the Greater New York section today and one has to wonder who the real target of the WSJ local efforts are.

It's ironic that the NY Post, another of Murdoch's paper, would play along with the boss and offer up its own story -- Times may lose NY ad turf to Wall Street Journal -- oblivious to the fact that what Murdoch is saying here is that the Post just can't cut it as a profitable competitor in New York. So bring the Post to the WSJ.

But before today's launch the real story was, as the Post link above points out, Murdoch's old world price war. For all the talk of paywalls and getting compensated for one's work, the weapons in this print war are the old ones: predatory pricing -- making the other guy hurt by purposely cutting prices below sustainable levels. The Times, at least for now, doesn't seem willing to play along.

"The advertisers are aware of the fact that our audience is 22 million in print and online versus the Journal's 13 (million)," Times president Janet Robinson said recently. "They're well aware of the fact that (45 percent) of Wall Street Journal readers already read The New York Times."

I have hardly mentioned this mini newspaper war on TNM because I don't currently see the New Media implications. As a Midwesterner, I look to the WSJ for financial news -- though much less often since Murdoch bought the paper -- and I look at the Times for national and international news. But if local New York news is important to you, doesn't the WSJ paywall, which charges premium prices, prevent local online readers from considering the WSJ as a local news source? In the end, my instincts tell me that the WSJ is using the weapons and tactics from the last war and may be surprised to find many of their assumptions completely wrong.