Content Bridges

Is This Synergy?: The WSJ Sandbox in Rupert's Digital Playground

Let's not be confused between the tattered paper sandbox -- the Wall Street Journal -- Rupert bought and the digital playground he's building. The sandbox occupies a nice, prestigious place in the playground, but it's the playground -- all things digital, including TV (Fox News Channel, Fox Business Channel), video and the Internet -- that makes a growth business of the deal. It's the sandbox that's gotten all of the attention, now going forward with its own fancy editorial review board. But it's the fit of the sandbox into the playground that may pose the rub, and the drama, in the years ahead.

The sandbox has its own storied rules. Do your homework. When there's a fight, listen to all sides. Don't throw sand in somebody's face unless you've got the goods on them. Certainly those rules will be tested under Rupert. But the sandbox has sturdy walls.

I'm not one who thinks the editorial board will be much protection. Really, it's Rupert's new Tea Club. If you think you're going to hear any rancorous announcements out of Rupert's Tea Club, forget it.

Editorial board member Nick Negroponte turns out to be a Friend of Rupert, who has contributed more than $2 million toward Negroponte's "One Laptop per Child" campaign.
Of course, if you think that Lou Boccardi, Jack Fuller, Tom Bray, Patty Dunn --- or shall we call them The Defenders of the Old Order -- are going to being blowing any whistles, forget about it. The meetings should be a good time, accompanied by smoked salmon and fine bottles of Aussie Sauvignon Blanc.

The Negroponte brouhaha does force "the explanations" to begin early, even before ink is applied to the contract. Astounding sight to see WSJ managing editor Marcus Brauchli begin the interim with a vigorous defense of Negroponte's association with Murdoch in his own paper -- ""We did not envision that members of the committee, News Corp. and Dow Jones would have no associations among or with each other, only that they would be people of integrity who are committed to ensuring our editorial independence."

Of course, that is the way the business world works, and not a bad thing about. Making connections, taking care of friends, supporting their good causes, passing them a lead here and there, giving them a break -- that's the way it's done.

But this is an editorial board. The whole idea of it -- can we forget this quickly -- is to insulate the Journal from Murdoch's well-demonstrated political influence and interference. It needs to have an arms-length relationship to News Corp, otherwise why spend the money of the salmon and Sauvignon. To see a Journal editor defending it, with this rationale at this point, is amazing. But it's just the perfect coda to last week's drama.

But, I digress.

No I don't think we'll see a lot of turmoil within the sandbox. Brauchli and team are outstanding journalists, and Murdoch knows many eyes will be upon the paper for the next year.

We'll see the sparks flying when Rupert starts applying the s-y-n-e-r-g-y that is the heart of the business deal. Synergy with the Fox Business Channel, which launches in October, is key. Put aside the CNBC/WSJ exclusivity agreement for a moment and consider that Murdoch has already plotted out the channel's market position -- "pro-business." Let's see, that's roughly analogous to Fox News being "pro-American." And we can see how that has worked out journalistically, as the network has made an Orwellian mockery out of "fair and balanced journalism".

Imagine the crawls. Replace the omnipresent orange alert levels with colors representing how pro- or anti-business Congress is as it contemplates tax laws, regulation and what went wrong with the mortgage industry. Imagine the kinds of anchors Fox News has used, to steer news coverage in favor of whichever politicians are in favor.

Times Select Unbound....But What Will Replace It?

Times Select has been buried, but the undertaker is the New York Post, so how much credence can we put in it? (And isn't that the simple point of the Murdoch/Dow Jones affair? When you read a report, you'd like to believe it, but with certain papers, and their owners, you just don't.)

There's been quite a Times Select debate, in and around Mickey Kaus on Slate and on Huff Post recently, fueled a bit more by the Post story. Yes, there is a chorus of skeptics about the Times Select idea, and it's not hard to join them.
When I raised the question of the Times' strategy with it, and with the newer "All Access", I emphasized the point that the Times is trying to hold onto print subscriber revenue. As you look at all the 2Q earnings numbers coming in, that point is only underlined. Print ad revenues are starting to get comfortable in a double-digit decline range -- and this is in a time of a good economy.

So the call to drop the Times Select barrier is only half an answer. Taking it down definitely would let the Times' columnists play on the free Web -- good for the national discourse. And more page views would bring in more dollars, arguably approaching the Times Select subscription revenue lost. But the problem is a deeper one. How does the Times pay all those reporters and editors?

One answer is the circulation revenue, which captures almost three out of every 10 dollars (28%) that the Times takes in overall. It's really a simple concept: you want deep, serious, experienced journalism, you pay for it. Just because the Internet has accidentally destroyed much of that model across the newspaper and magazine world doesn't mean it's not worthwhile.

Yes, you can get loads of "good-enough" journalism, free, 24/7, on the web. But is it worth paying something for higher-quality content? Ask your friends. Ask around. They'll tell you they do know the difference between the Times, for instance, and the good-enough stuff they see all around them. But, hey, who needs to read on paper anymore, so why pay for the paper? And it's not their problem that the world's changing around. Okay, maybe they'll you, if pressed, that they feel a little sheepish about not paying something....but , hey have you seen their new iPhone?

Bad Rupert, Good Rupert: Revisionism at Internet Speed

This is the way revisionism works on the Internet: at warp speed. I think the algorithm could go something like this: owning the Journal means Rupert can't be so bad, otherwise he wouldn't own the Wall Street Journal, right?

Before we forget, a quick guide to the transformation of conventional wisdom, the Old (last week) and the New (this week) Ruperts:

Complete Dow Jones Coverage, here

Former Corporate KR Space Filled....With Awe

The Knight Ridder goodbyes keep on coming more than a year after the formal passing.

This week brought new tenants to Knight Ridder Corporate's old space, in the classiest office building in downtown San Jose, still signed as the Knight Ridder Building, because no one wants to buy to take down the expensive signage flying atop the structure.

How good is the space?

Let the Mercury News, erstwhile KR paper, describe it:

"The Knight Ridder space on the 15th floor is among the best, if not the best designed and finished floor space in all of San Jose," said [Dennis Brown]. "The materials that were used, the layout of the floor is all first-rate. It's spectacular."

Granite floors, marble countertops, exquisite woodwork and top-of-the-line furniture await the firm when it moves in sometime in October.

Normally a tenant will spend about $30 a square foot to prepare office space - and maybe double that for high-end space - according to Kevin Crawford, director of corporate services for Ritchie Commercial. Knight Ridder, however, spent on average $120 a square foot when the company moved its headquarters from Miami to San Jose in 1998, he said.

Newspapers' (Literal) Vanishing Acts

It's not our eyes.

We know the page width has been reduced at most papers (and with it, the depth).

We know there are fewer pages in the paper, fewer ads and, yes, fewer, and shorter, stories.

We know there are fewer reporters out there, finding out what's happening and reporting it.

Now we see the physical presence of newspapers -- long primal, central, local institutions -- reduced or moved away.

The latest case is in Santa Cruz, which had had a locally owned paper until 1982. The Sentinel then was sold and became an Ottaway paper. You'll recall how eloquent Jim Ottaway has been throughout the News Corp bid process, extolling the need for local journalism.
The Ottaways long ran a prosperous and community-oriented group of dailies across the country. Last year, beginning to reel from the print ad downturn, Dow Jones (which had bought the Ottaway chain in 1970) put a group of them on the market. A half dozen, including the Sentinel, was sold to CNHI, a newer company that's been on a bargain hunt for smaller town newspaper properties. In October of last year, CNHI got the Sentinel. In February, it re-sold the Sentinel to Dean Singleton's Media News.

(Now with News Corp's acquisition of Dow Jones, look for the remaining Ottaway papers to be shopped quickly as well.)

The Sentinel joined what had quickly become the largest newspaper group in the prosperous and well-educated Bay Area. It joined the Alameda Newspaper Group, which Singleton had assembled from a number of properties over the years, and the Contra Costa Times and the San Jose Mercury News, both papers bought from McClatchy in 2006.

Singleton's approach is the dominant one in the industry -- clustering. It's a simple concept. Buy up as many papers in one area as you can, ones close enough together so that you can combine as many operations as possible, from news-gathering and ad-selling to production and distribution.

It makes good economic sense and might be a way to preserve the core of newspapers' central importance in their communities -- if it's not carried too far.

It's been carried too far, already, in Santa Cruz, and I'm sure in many communities around the nation. And we're closer to the beginning of the cuts than the end.

Consider the Santa Cruz experience:

---In March, the paper closed down its local presses, long a viewable fixture on Church Street, and began printing the paper nightly over the hill on the Mercury News presses. Deadlines moved up at least an hour.

---In June, the paper cut its reporting staff by 21%. That's 8 of 38 positions. For vituperative community reaction, you can check out gutting several beats">this reaction.

---Last week, it announced it has sold its building -- the iconic one built in 1856 and which has housed the oldest business in town. It's move from Santa Cruz's vibrant downtown and true regional center to Scotts Valley, a suburb on the edge of the county. The sales price of the real estate was undisclosed, but it had been put on the market at $6 million.

Certainly the newspaper business needs to do its cutting. But it's how the cutting is done -- how much art, how much blood -- that will be the history of this time.

In the meantime, we can be sure that our sight isn't deceiving us. The press is literally vanishing before our eyes.