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As most newspapers cut back on their budgets and staff, Rupert Murdoch's Wall Street Journal is expanding — launching a new New York section to rival The New York Times' coverage (and steal some of its rival publication's advertising).
Today, Murdoch outlined his logic in growing the paper while other papers shutter their local bureaus. Speaking at the Real Estate Board of New York meeting, he put it simply:
"Technology is putting a premium on content."
In addition to betting that consumers are willing to pay for quality content, Murdoch is investing in his theory. At a time when publishing revenues are shaky at best, Murdoch is spending $15 million to get The Wall Street Journal's New York coverage on par with The Times. He continued:
"We’re adding a whole new section and taking on reporters and editors. We believe that in its pursuit of journalism prizes and a national reputation, a certain other New York daily has essentially stopped covering the city the way it once did. In so doing, they have mistakenly overlooked the most fascinating city in the world – and left the interests and concerns of people like you far behind them. I promise you this: The Wall Street Journal will not make that mistake."
Meanwhile, bringing in revenue for newspaper content is a very real problem that Murdoch knows all too clearly. But he thinks that with quality content, revenues will follow:
"Technology has not reduced the demand for information. But it has given customers more tools to get what they want – and avoid what they don’t want. For those of us in the news business, the answer to this challenge is the same thing that has always made newspapers great: The bond we have with our readers and subscribers."
Of course, newspapers still need to make money off this bond. And while consumers can more readily find the things that they want online, they can also find things that are similar — and cheaper.
Murdoch's proposition, that consumers will pay for qualty content — has been proven in many areas — cable television for one. But cable providers have done an impressive job cutting off their content to anyone but paid subscribers. And due to the high cost of producing quality video, they've been mostly untouchable for a long time.
In the news industry, there are plenty of free sources of online content that — unlike large daily newspapers — can survive on advertising alone. If Murdoch can create enough high quality news to differentiate this new section, The Journal will have a new section that defies media trends today. But with a $15 million investment to do it, it won't be a model easily replicated.