What Are They Thinking? Gerry Baker on WSJ Pro’s Mile-Deep, Inch-Wide Strategy
There are the pros and then there are the Pros. What separates them is about $2,000 a year.
That’s the price of the Wall Street Journal’s maiden WSJ Pro product – this one on central banking – and the four to six to be launched by end of the next year. For Dow Jones CEO Will Lewis and Journal editor-in-chief Gerry Baker, the new product, announced Thursday (“WSJ Announces ‘Pro’ Service’”), is a small capstone, one both of the ongoing newsroom reorganization and of a new strategic marketing direction. Combined with other recent product overhauls (“WSJ to revamp Money and Investing, Greater New York sections”), the initiatives point to a coming-out party, as the Journal finally picks up steam finally exiting its lethargic Lex Fenwick-as-CEO period.
Lewis sees the product plowing new ground, and a new category: B2P or business-to-professional publishing.
“The strategic significance from an internal perspective is it’s our first foray into B2P. There’s been this historic divide between B2C and B2B side of business which we’ve been correctly trying to water down without any way of undermining the uniqueness of Factiva [its news industry archive product] for example and it’s audience. There’s a preferred product range where we are going to take the best of both worlds and charge a near professional price using content from both the consumer side and in some instances from the B2B side.”
First published at Politico Media
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Consider WSJ Pro a new arrival of an inch-wide, mile-deep product strategy.
This Pro series picks up the moniker from this site, POLITICO. POLITICO’s series of Pro products first launched in 2010. Those 14 POLITICO Pros now account for about 40 percent of POLITICO’s overall revenue, as that company aims to make them one-half of total income. The Pro model – now adopted by news organizations larger and smaller, including recently by Cox’s Atlanta Journal-Constitution (“Cox’s Dawg Nation itches the local niche”) – offers much appeal in an age of challenged publisher advertising revenues.
Here, the Journal wishes to emulate its cross-town rival, The New York Times, which has turned itself into a majority reader revenue operation. The Journal, with now-similar digital-only pricing, but much lower print subscription pricing, aims to expand reader revenue, small step by small step. With print advertising on decline and digital advertising a tough, competitive go, the Journal, like its peers, needs to find revenue and profit growth.
WSJ Pro relies entirely on reader revenue; it will feature no advertising. At an initial $2,000 price point, with a full $2,400 to come later, it doesn’t require large numbers to throw off new profit. At 2,500 subscribers, it would be a $5 million+ revenue source.
Interestingly, word in the business news sector is that the Journal tested significantly higher price points. Those included $4,000, $7,000 and $10,000. Those higher prices would have included greater inclusions of conference attendance and relevant database availability. Given its in-person research, we can conclude from the Journal’s initiative, and similar ones, that the $2,000-2,500 price point is today’s sweet spot.
The Journal long has offered other niche products – but those have been aimed at certain job titles, like CIO Journal and CFO Journal.
Gerry Baker lays out the distinction between those, which will continue, and the new Pros.
“Those are sponsored models. Single advertisers sponsor them, and they are essentially free to subscribers. They’re not a premium subscription service…. Clearly it’s the same sort of audience, but the first thing to say is they are topic-based. What we’re doing here, I think, is looking at it from the other end of the telescope, if you like. We’re talking about topics. We’re talking about subjects. Where the journal has particular expertise, particular strengths, the Journal and Dow Jones have particular strengths.”
The focus: “expertise and specialism.” It’s a mantra we hear widely in the small competitive sector of business journalism. New Bloomberg editor John Micklethwait has laid out a similar need for expertise in this digital age.
For the Central Banking Pro, Baker has combined resources over time, taking what had been separate staff from the wires and the Journal, both covering the Fed, for example.
Importantly, though, the Journal now invests new resources to prove out the value prop for Pro subscribers. Overall, the Journal says it has added six to eight positions dedicated to central bank coverage, in the U.S. and elsewhere. One of those is an editor dedicated specifically to this product.
Further, the product should be aided by the parallel re-skilling process the newsroom has seen over the past year, with new talent hired in app and mobile technology generally and in graphics.
On a typical day, Baker says Pro subscribers will get “a dozen or so items, most of them exclusive to pro, which will be our reporters’ and our editors’ takes on the important events overnight in Europe or China. It will be some information from [highly regarded financial correspondent] Jon Hilsenrath, and what he thinks the jobs numbers might mean and what the fed is going to do.”
Baker is keenly mindful of the larger Journal audience as well.
“We’ve got to make sure that we’re feeding both audiences. I think it’s complimentary here, rather than necessarily contradictory. The audience that wants, that subscribes to the Wall Street Journal for a few hundred dollars a year is not necessarily looking for the kind of advantage, the inside advantage, that something like the pro product will give you. You can give them the strength analysis of what the fed did yesterday, and give them the strength analysis of what the Chinese central bank, and what the People’s Bank of China did…. I have to make sure that we’re providing the right balance between the two audiences.”
In addition to the Journal’s expanded, original content, the Journal will pull archival coverage from its Factiva aggregation products, trying to again bring B2B/B2C synergies to the collection of businesses that Rupert Murdoch bought in 2009.
This foray marks the second use of the Pro strategy for the Journal. In 2009, it charged professionals up to $49 per month for a “professional edition” of the Journal, but later closed that effort when revenue fell short. This time, it believes it offers a better, targeted package for narrower interest groups.
Expect at least one other Pro product to roll out this fall, and then the rest next year. Among likely topics for Pro: financial regulation, M & A and technology.
This Pro movement, of which we’ll undoubtedly see more here and there, offers both business and journalistic learning. It is deeper expertise, rather than more words, that create customer value. Readers want to understand the news – and often as immediately as possible after a story breaks. Any skilled reporter could cover a central bank story; only those deeply knowledgeable about the field, its history and players, can supply the analysis and perspective that readers find differentiating.
We can see that learning in the transition of the Dow Jones Newswires business. By its wire nature, its coverage often was more a yard wide, but often only a few inches deep. Now, with that kind of content increasingly commoditized, the dimensions at the Journal – and elsewhere – see reversal.
Here, then, we can see the lineage of change at the Journal, and some new fruit the company thinks is finally ripe to be picked.
“When I took over three years ago, when I took over the whole Dow Jones newsroom,” says Baker, “we brought Newswires and the Journal together. They’ve been coming together for a long time, but we completed the process.”
Importantly, the Pro model offers more than a simple curation of content, a better packaging and design to make content easier to find. Baker says that well more than 50 percent of the Pro’s content will be unique to Pro – not pulled from the Journal’s vast operating force of 1,800 or so journalists, now that the Dow Jones Wires operation, and others, have been combined into a singular news force.
Interestingly, here even the nation’s business newspaper sees the limits of its mass business news business, and goes niche. The Internet rewards publishers with passionate niche audiences. If those audiences are in the money-changing trades, then the more likely to multiply what had been a $360 a year WSJ print sub into a $2,400 one. Each Pro subscriber will get a full WSJ all-access sub, so the Pro model can be seen as an upgrade product. It’s unlikely that many Pro customers don’t have already have Journal subscriptions.
Though Pro eschews advertising – believing that those paying a couple of thousand dollars a year want an ad-free product – it will test other revenue sources. Out of the box, it is offering several Pro member-only on-the-record events with newsmakers and members of the Journal’s newsroom. Those will be free for now, but it’s easy to see how the Journal can connect these emerging verticals to its wider events programs. Further, says Baker, “We’re also looking at interesting products for the central banking verticals. Things like data.”
CEO Will Lewis has set a reach goal of three million subscribers for the Journal. While the Pro line is intended to goose revenue, it’s unclear how Pro subscriptions would be counted for circulation purposes. At this point, the Journal says it’s not clear whether they would be counted as two (Journal and WSJ Pro) or one.
If and as WSJ Pro works as a business model, it will be necessarily compared to the New York Times’ own foray into niche, paid products. That major initiative, led by NYT Now, aimed at a very different niche market — a younger, mobile under $10 per month one. Seeing too small adoption, the Times turned NYT Now free and pulled its similarly modeled NYT Opinion product from the market. That paid niche failure threw some cold water on others’ paid niche experimentation – we haven’t seen much like it in 2015 – and the Journal’s success may rekindle thinking there.
Yet, this professional-paying, digitally updated-from-the-old-B2B-newsletter business may only reinforce the belief that only business news will open wallets wider.
While the Journal looks to be dedicating a smart level of resource to the new business, it’s now alone. The Financial Times – its now better-financially fortified competitor due its acquisition by Nikkei– has worked the niche zone, but more geographically. Its FT Confidential Insights fetch a similar price point as Pro.
In the end, ironically, for a business news publication, the Pro focus bears testimony to the first rule of business. Says Baker, “How can we extract more value?”