Interview to Dow Jones
Q. What is the biggest challenge facing Dow Jones in the next few years?
A. To continue investing in new products and services that will
strengthen our franchises, increase our competitiveness and produce new revenue
flows in the future, while at the same time being careful in setting priorities,
prudent in controlling costs, and committed to producing strong annual profits.
Q. Who are the major competitors of Dow Jones?
A. In the broadest sense, any quality products or services that compete
for the time and attention of busy businesspeople compete with Dow Jones. More
specifically, we have some franchises such as The Wall Street Journal that are
dominant in their fields. In other cases, we face particular competitors; Dow
Jones Telerate, for example, competes with Reuters in offering real-time
financial information around the world.
We believe, however, that Dow Jones is a unique company in a number of important
respects. Our businesses are balanced roughly 50-50 between print and electronic
information. More than 40% of our operating profit is now earned outside the U.S.
We are a focused company. We are not a media conglomerate, nor an entertainment
company. We stick to our business of business, providing information essential
to an ever expanding and increasingly interconnected worldwide business
Q. What is the strategy behind your television operations?
A. Dow Jones aims to provide business news in any form customers want it.
When we looked at our operations a few years ago, television was the missing
means of delivery for our business news. We began by pioneering with Asia's
first business channel, Asia Business News, in late 1993 and followed with
Europe's first business channel, European Business News, in early 1995. Both
have achieved significant distribution success and viewer acceptance. Both also
take advantage of Dow Jones' existing news flows and news talent in those
regions. When we launch WBIS+ in New York later this year, we will begin daily
business programming in the U.S., thus adding the third component of a global
business network. The ITT sports programming will help to draw even larger
Q. What is the profile of a typical Wall Street Journal reader?
A. The typical reader of the Journal spends 49 minutes every business
day with the newspaper. He or she might be a senior executive of a large
corporation or the entrepreneur-owner of a smaller company. The reader is more
likely to live in California than New York, has a median age of 46 and a median
household income of $117,900. Interestingly, most of the customers registering
for the Journal's Internet service are not current Journal readers. Thus, while
the Journal's brand name and reputation clearly help to attract customers, the
Internet offers untapped markets for us.
Q. What is the Journal's editorial philosophy?
A. The Journal's news pages, like those of all our other publications,
simply seek to report the news and explain its significance as accurately,
fairly and honestly as humanly possible. The Journal's editorial pages, which
function independently from the news pages, propound a consistent philosophy
that can be summed up as "free people, free markets." Our editorial pages thus
stand for open markets, free enterprise, free trade and the free movement of
people. These pages oppose government or other encroachments on political or
economic freedoms. The Contract With America that set much of Washington's
agenda in 1995 includes many tenets of this Journal philosophy, but the Journal
editorial pages are no mouthpiece for any political party. Rather, the editorial
staff views its role as that of the conscience of a populist political
Q. What will be the impact of bank consolidations in the U.S. in 1995
and perhaps 1996 on Dow Jones Telerate revenue?
A. At any given time, consolidations or contractions in some segment of
the world financial community can temporarily slow revenue growth in some part
of Dow Jones. At the same time, we view U.S. bank consolidations as a downward
blip in what is a generally growing worldwide financial industry. Additionally,
of course, Dow Jones' total array of products serves a business community far
broader than simply banks or other financial institutions.
Q. What are the competitive pressures on Dow Jones Telerate's business?
A. While Dow Jones Telerate faces worthy competition in a fast-paced
business marketplace, it successfully continues to grow. We invest in content,
as we broaden our array of data and useful new applications. We are also
expanding into new markets throughout the world from Latin America to India.
These moves add up to increased revenue and profits for Dow Jones Telerate.
Q. How do you plan to produce revenue and profit from your Internet
A. Even though Internet information generally has been thought of as
free, Dow Jones business news and information, because it is exclusive and
essential, has value for customers regardless of the medium. Therefore, we are
confident that we will create a successful formula for subscription pricing on
the Internet. Additionally, we are confident that Dow Jones advertisers will pay
fair value to participate in our Internet services. Money & Investing Update,
our first Internet entry, already has more than a dozen paid advertisers.
Q. Will rising newsprint prices continue to affect Dow Jones' business
A. We anticipate some modest further increase in newsprint costs this
year but not of the magnitude of the roughly 50% increase of 1995. Dow Jones'
equity investments in two newsprint mills in Canada and Virginia partially help
offset the impact of those price increases. More important, the fact that some
50% of Dow Jones revenue is from electronic services limits the effect of
newsprint price increases. In total, newsprint comprises just 8% of Dow Jones'
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