By: Jennifer Saba
For more than 60 years, readers could relax knowing that The Wall Street Journal’s look would remain pretty much the same. The blocky columns, the predictable jump placements, the wash of gray — a 1941 edition could have graced a newsstand early in this century and many strolling by wouldn’t have blinked.
Its design also had enormous influence on other newspapers. Legendary Journal Editor Barney Kilgore dreamed up the “What’s News” column in 1941, giving readers a quick synopsis of events. You’d be hard-pressed to find a newspaper these days without a box detailing what’s inside Section A.
So when the Journal went through a mini-redesign in 2002 with the addition of color, shaded boxes, and photographs, some considered it sacrilege. The launch of the Weekend Edition in September 2005, with its softer content, made other heads spin.
But they should have waited to pass judgment until next Tuesday, Jan. 2, when executives with parent Dow Jones & Co. will unveil a substantial redesign, which will lop off one-fifth of its page width. The slimmer size means more dramatic changes in what sounds like a nod to USA Today: shorter stories, bullet points, and infographics. Purists will be agog when the paper of record for CEOs borrows from the paper of record on the Delta shuttle.
But L. Gordon Crovitz, publisher of the Journal, is having none of it. He says he’s “girded for the letters of complaints written with quills on parchment” when the new Journal hits the streets.
Since taking the helm of the Journal in February (he’s also executive vice president of Dow Jones and president of the consumer media group), Crovitz is steering one of the biggest transformations in its 117-year history. For the first time the paper is cutting its web width format, from 60 inches to 48 inches — a move projected to save some $18 million annually.
The size reduction is not so radical, as U.S. papers lean more toward tabloid formats and splashy layouts. The Journal was among the last major dailies to print on a 60-inch web-width, according to the Newspaper Association of America.
But Crovitz is overseeing more than a redesign. Journal 3.0, the corporate speak tagged to the project, encompasses the entire organization. He is rethinking how the Journal and its siblings like Dow Jones Newswires and MarketWatch produce and distribute content in an age in which newspapers are fast becoming an arguably irrelevant place to break news.
Man with the plan
“I’m the only person in America with ‘newspaper publisher’ in my title that is still an optimist,” Crovitz said during a keynote speech to a group of editors at the Harvard Club in New York.
While extremely soft-spoken, Crovitz’s steely determination and damn-the-naysayers attitude comes at a time when the industry is wearing what appears to be a permanent “kick me” sign. Plummeting circulation, falling ad revenue, incredibly shrinking staffs, impatient investors — this is hardly the stuff of a rosy future.
And while the Journal is set apart in some ways from other newspapers with its specific content — and subscription Web site — it’s still saddled by the usual industry problems. The paper may not lean heavily on classified advertising, but it’s hamstrung by the narrow focus of the financial and technology categories.
The Weekend Edition was supposed to alleviate that problem by attracting high-end consumer advertisers, but its unclear if that’s working. Bryan Jackson, director of newspaper investment at OMD advertising agency in Atlanta, notes that while the Journal has an “impressive audience,” a financial paper may not be the best environment for high-end consumer goods: “It’s a bit of a stretch.”
For all the quiet bravado, Crovitz is no interloper in newspapering. He started with the company as a summer college intern but officially joined in 1981 as an editorial writer for the Journal after his formal education. He attended the University of Chicago for his undergraduate work before earning two law degrees, one from Wadham College at Oxford University (where he was a Rhodes scholar ) and another one from Yale University. He then moved east and spent six years in Hong Kong, eventually serving as editor and publisher of the Far Eastern Economic Review before he was appointed vice president of planning and development at Dow Jones.
In 1998 he made his mark as the company’s senior vice president of the Electronic Publishing group where his duties included oversight of the online Journal. While in that position, the division’s revenues doubled to more than $500 million, operating income tripled to more than $110 million, and the operating margin grew from less than 5% to more than 22%.
Given his experience in the online arena, Crovitz is positive about the Journal’s new direction — and, if he has his way, he will put the content of Dow Jones before readers’ eyeballs regardless of their current method of delivery.
“I think a lot of traditional newspaper publishers say, ‘Wouldn’t it be great if one day we make as much money on our Web sites as we do in print?’ — that’s not our strategy,” Crovitz says, sitting in his office on a rainy morning in mid-November. “Our strategy is for business leaders to engage with the Wall Street Journal all day long. Coca-Cola for years said they wanted to get a can of Coke within arm’s reach of everyone in the world. We now have the Journal within arm’s length to everyone in the world who wants it.”
To do that, the print edition of the Journal will move even further away from breaking news, letting the online version and its sister properties pick up the slack. The idea is to free up Journal reporters so they can do more in-depth, analysis-type stories that will better explain what the breaking news means.
Crovitz offers one example: When word broke that the British government foiled a terrorist group’s plot to blow up airplanes over the Atlantic, the Journal had sent out an e-mail alert to subscribers in the early morning hours of Aug. 10. “I actually had a friend in transit in [London’s Heathrow Airport] from Nairobi on her way to New York. They closed Heathrow and they weren’t telling people why. So she got this alert on her BlackBerry,” he recalls. “It’s a reminder in the digital age, getting news first is very important.”
The Aug. 11 edition of the print Journal, which had assumed that readers had already digested the news, ran with a story headlined “U.K. Terror Plot Points to New Threat.” Crovitz asserts with some pride that on Aug. 11, his competition — The New York Times and the Financial Times — mainly focused on the news angle in their print editions.
“We operate as a franchise with many different channels, and we optimize each channel for what it does best,” says Crovitz. “We’re unique in having a real-time service for financial professionals and a real-time service for consumers. We have multiple news departments for multiple audiences, which gives us the ability to share content across different parts of the company.”
Not your father’s ‘Journal’
All of this circles back to a newly redesigned print edition of the Journal. The publisher maintains that while the paper is losing a substantial amount of column inches, the newshole will remain relatively stable. It will come at the expense of stock agate and the “pruning” of commoditized information in the Money & Investing section.
For example, the Journal may not run an article on a mid-cap company’s earning results. Instead, there might be a headline highlighting a one-sentence recap and a refer driving people to other Dow Jones properties online, such as MarketWatch. MarketWatch’s Web site in turn will pick up the ball with a more substantive story than what appeared in print.
The Journal always had this luxury of analysis setting it apart from other U.S. newspapers. It’s unbound by geography. It has a ready-made audience: middle-age business executives and young bucks with C-suite aspirations.
“The Journal is very different from other large newspapers,” says John Janedis, a senior analyst with Wachovia Equity Research. “It serves a community with an interest in business.” Janedis stamped an “outperform” rating on Dow Jones based in part on the company’s above-average ad revenue growth forecasted in 2007 and the belief “that the Wall Street Journal franchise is more ‘defensible’ than other papers,” he wrote in a report.
Peter Appert, an analyst with Goldman Sachs, believes the paper is in a much better position than its peers, even though he has a “sell” rating on the company: “They have proprietary content that is not replaceable.”
The Journal capitalized on this advantage early in the development of its online property by charging readers for much of its content. Crovitz says about 765,000 people currently subscribe to the online edition. That number includes duplicates — the people who get access to the online version because they receive the print edition. Of the total number of subscribers, roughly half take only the online Journal.
Not surprisingly, the readers of the print edition skew older, with an average age of 55. Online-only subscribers are younger, by at least a decade. But here’s where Crovitz is staking his turf. Contrary to many big city newspapers that are retrenching by serving core and loyal readers with the print product, the publisher is betting he can lure non-print Journal readers into the paper.
“We have the opportunity with Journal 3.0 to make the case to half of our online Journal subscriber base that even if they are not going to read any newspaper or magazine, they have got to read the print Journal. It’s a great complement to the online Journal,” he says.
Best (new) face forward
The idea of people who take their news in pixels warming to print plays into the new design of the paper. Famed newspaper designer Mario Garcia has been working with the Journal over the past 14 months on Journal 3.0. He “cleaned up” the paper’s traditional fonts, including Scotch (which the paper had been using for 81 years), making it larger and easier to read. To Garcia, the most fascinating aspect of the redesign is the navigation, since the headline, decks, and summary will give readers a quick low-down on content — making the paper more “scanner” friendly. There’s more color and more information graphics. Every page, not just the section fronts, has been revised in some way.
“I studied this with a sense of respect,” says Garcia, who also presided over the Journal’s slight design changes in 2002. “I have to be careful about making the changes there,” he adds, noting that working with the Journal was like being asked to “repaint the Sistine Chapel.”
The paper’s executives have recently been on a road trip, showing off the Journal’s new format to key advertisers. OMD’s Jackson made this observation: “The front page hasn’t changed too drastically. The bigger changes are in the Marketplace and Money & Investing sections that look more like the weekend Journal — a little more USA Today-like with larger format pictures and more color.
“It’s interesting, having read the Journal for years. I understand they are trying to cater to the time-crunched executive. Their efforts are commendable.”
Many papers throughout the country go through redesigns — bigger photos, more color, quick bullet points — in hopes of upping circulation only to find that people still turn away (see page 40). Garcia believes that even the best design cannot mask lackluster content. No matter how much a paper is dolled up, if it’s not worth reading, people won’t bother.
Garcia worked with not just the art department, but also with a group of editors. Unlike projects he worked on with other papers, dummy text was verboten. Every idea that was run up the flagpole used real headlines and new stories.
The analysts weigh in
Goldman Sachs’ Appert likes that “the pace of change has accelerated” at Dow Jones since Crovitz and his boss, CEO Richard Zannino, took over almost a year ago. That includes the smaller page size and the front-page ads introduced even before the relaunch — moves the company should have made a while ago, Appert contends.
But he points out circulation and advertising results are still volatile at the Journal, hence the “sell” rating. For instance, when the paper announced it had grown its individually paid circulation by 9%, Appert was impressed. That is, until he read the press release and realized the Journal’s gain came about by discounting (overall, the paper’s circ fell 1.9%). By employing that strategy, he says, “you just train your customers to expect the discount price.” Gordon sees it otherwise, maintaining that the more papers they can get into readers’ hands, the better.
Appert also raises an eyebrow over the paper’s ability to attract non-print readers. “If [the Journal] could get more hybrid subscribers, that would be a dream come true,” he tells E&P. “I think it might work the other way. Take some of your dinosaur readers like myself and incentivize us to read Internet-based stories. ? I would be skeptical if it goes the other direction.”
Win or go home
If Crovitz has his way, he plans to buck the trend of gutting the newsroom. He thinks the new Journal and reorganization of the company will allow Dow Jones to maintain staffing levels. Zannino has been saying the same thing: He told his paper when he was appointed chief officer that Dow Jones “can’t expense its way to profitability.” (Zannino declined to be interviewed for this story.)
As for the intentions of keeping the newsroom fat and happy, some staffers are cynical. For unionized employees — which means practically everyone at Dow Jones, save management and security guards — it could come down to another nasty fight similar to the long negotiations and byline strike that occurred three years ago. The current contract expires in January 2007, and both sides have submitted outlines. The negotiations are still in the early stages, but already union members have stopped making appearances on CNBC (to which Dow Jones provides content) due to the shaky nature of the talks thus far.
Management “made some very draconian proposals,” says E.S. “Jim” Browning, a 27-year staff reporter at the Journal who is chairman of the bargaining committee for the union. Browning was so incensed by the previous negotiations that he and other reporters decided to get more involved with the union.
Management’s first stab at a contract includes the doubling of annual health care premiums, meager wage increases of 2% a year (which doesn’t even keep up with inflation, Browning notes), and the elimination of the seniority protection clause (first hired, last fired).
Steve Yount, president of the Independent Association of Publisher’s Employees (IAPE) and a news anchor on Wall Street Journal radio, is cautioning management where to make cuts. “It’s one thing to tell people to share a printer,” he says. “It’s quite another to ravage health care.”
Yount hasn’t written anyone off yet. “I think Gordon Crovitz is a very good man, and is honest about preserving the quality of the Wall Street Journal and all the products at Dow Jones,” he says. “From everything Gordon has told me, I have no reason to believe he is not serious.”
Some newsroom staffers, however, are afraid that the Journal 3.0 concept is less about transformation and more about dealing with cost-cutting measures. Several reporters who did not want to be named said they are doubtful they will get more time to write long-form journalism, especially since the paper is losing space. They fear that all Journal 3.0 will amount to is more work on more platforms.
One reporter said there already is a good deal of overlap among all the news departments of the organization. The wires, MarketWatch, and the online Journal, for example, may all cover the same story. However, the company is trying to streamline by ordering an internal report on how news flows from division to division, an effort headed up by Dow Jones Newswire President Paul Ingrassia.
“For all my complaints,” says Browning, “everyone in the newsroom would love it to succeed and people will be working very hard to make it succeed. Our future depends on the success of the newspaper.”