Gerard Baker, Editor-in-Chief of The Wall Street Journal (WSJ), hopes you are one of the 2.3 million paying subscribers of the WSJ. He also would like to invite you for a beer if you have superb ideas on how to monetize an additional 19 million monthly, non-subscribing readers!
Gerard Baker was invited to speak at the Wharton Club of New York President’s Forum on March 10, by WCNY President Kenny Beck, WG’87. He proved to be entertaining and illuminating as he offered up the bad news for the news industry as well as his prescription for it.
He explained that the traditional model — “We write news for readers, and people who want to reach those readers buy ads” — is still valid. That being said, newspaper print advertising revenue has declined in the U.S. by 65% in the past 15 years. Print advertising has been largely replaced by digital advertising, but the bulk of those digital dollars has moved to digital “native”
organizations (organizations that are born on the Internet). Worse, a huge amount of content that people used to pay for can now be had for free. Thus, Baker told us that, when he received his promotion to Editor-in-Chief, a friend joked he was like the last governor of Massachusetts before the American Revolution.
Why then does he feel so optimistic?
First, he explained, until a few years ago, newspaper journalism suffered from massive overcapacity. The traditional newspaper model was built around the great regional newspapers, such as The Dallas Morning News, Chicago Tribune and The Los Angeles Times. They covered not only news from the local area, but also news from around the world, because they were “the” source of news for their regions.
When Baker was the White House Correspondent for the Financial Times, a full 80 correspondents had their own assigned places, and another 80 stood in the back. Many newspapers had foreign correspondents. As the Digital Age arrived, it became clear that you didn’t actually need all those journalists.
Today, newspapers continue to close or close their print editions — such as New Orleans’ The Times-Picayune and Detroit Free Press. Local papers, like The Seattle Times, cover local news.
However, the national papers stayed strong. The WSJ has 1,800 reporters around the world, providing the highest quality news from across the globe. While advertising declined, circulation has increased to 2.3 million, the largest selling newspaper by far in the U.S. Baker added, “We still sell 1.3 million printed copies every day. The other 1 million daily readers are digital,
and who are increasingly consuming on mobile.”
Asked about the opportunities to grow and maintain readership, Baker offered four prescriptions. First, expand cultural coverage. While the WSJ is first and foremost a business newspaper, it has successfully broadened into culture — for example, its appeal to fashion through the popular WSJ Magazine. Also, its luxury real estate portal, Mansions, is one of its most well-read sections and brings in new subscribers.
Second, grow globally! Whereas 15% of the Financial Times is in the U.K., at the WSJ, 85% of its readership is in the U.S., so it has a nice opportunity for growth. 2015 acquisition News Corporation’s of Indian media company VCCircle, on top of other recent investments, will enhance its position on the Indian subcontinent.
Third, be relevant. One thing the paper has discovered is that young readers, when presented with the WSJ for the first time, value content relevant to their careers and the content on personal finance.
Fourth, and most critical: Earn and keep your reader’s trust. Baker explained, “As content proliferates, the demand for quality that you can trust has increased. People need a guide that they can depend on. At 125 years, the WSJ has the good fortune to be more trusted by more people than any other news source around the world. I claim no credit for that — I’m the beneficiary of that. That is something I have to protect.”
So, despite the decline in the core business, the demand for business and general news reporting that is reliable and objective has never been greater.
Several alumni at the event asked how he perceived the future of the U.S. He shared that he recently had lunch with Lloyd Blankfein and asked him a similar question, “Where do you see the most energy and optimism? Baker thought Blankfein might say China or Brazil. Straightaway, Blankfein responded, “Silicon Valley. That is where the most exciting things are going on, where the intellectual power is.”
In addition, Baker believes that the transformation of U.S. energy production is one of the significant economic stories of the decade and is changing the global economic equation. In contrast, he perceives that Europe’s global relevance is declining, and it will be messy, with the rising tide of populism. People are tired of waiting for the government to do something.
An alumna asked about what it takes to be hired as a reporter at the WSJ. Baker told her that the normal ratio is 2,000 applications received for 20 positions filled. His best advice, he said, is to focus on a specialty. One of the defining characteristics of readers is that they are looking for reliable expertise.