Hyderabad: The publisher of the world’s largest financial daily, The Wall Street Journal (WSJ), Dow Jones and Co. has substantial investment plans for India, but these will initially be more in the business-to-business segment rather than in print media, chief executive Les Hinton said in an interview. He also sees more opportunities in the mobile phone space as cellphone penetration in the country is much greater than that of computers.
Fantastic environment: A file photo of Dow Jones chief executive Les Hinton in his New York office. Mark Lennihan / AP
Hinton, in Hyderabad on Tuesday for the 62nd World Newspaper Congress, said the print media has to build multiple sources of revenue, such as online services, rather than depend on advertising. Mint has an exclusive content partnership with WSJ. Edited excerpts:
Is ‘WSJ’ now the No. 1 paper in the US under your leadership, taking over from ‘USA Today’?
Yes. We overtook USA Today just this year and we regained our position we had several years ago as the No. 1 selling newspaper. And we did it during the period when other newspapers were losing circulation.
How did you achieve that considering ‘WSJ’ increased its cover price?
Well, we increased our cover price and we increased our online costs and at the same time, we believe we improved the newspaper. And the result speaks for itself. We had a great success in growing our paper.
Has advertising increased? Do newspapers need to look at new sources of revenue other than advertising?
Along with every other newspaper, we also took a hit in the financial crisis. We did lose our advertising. It has started now to strengthen again. I absolutely agree that the need for us is to find other sources of revenue and the most obvious source of revenue is from customers who are using our online services. They are willing to pay for it and we have increased our prices.
What is your India plan? How much investment is Dow Jones looking at for the country? How many people have you hired here?
We have hired just 60 journalists. And we have lots of plans, initially in the business-to-business (B2B segment) with our newswire business.
We believe that mobile is a very important platform for us in this market and it is generally accepted that the mobile penetration in this market is far ahead of PC (personal computer) penetration. We have already started printing the facsimile edition of the WSJ, the Asian edition.
We haven’t revealed the India investment but it is substantial.
Once the media policy changes and the foreign direct investment limit is increased, would Dow Jones look at an Indian edition of ‘WSJ’?
Well, when and if the rules change, clearly we will look at what makes sense. But we do think that our opportunity here mainly is going to be in (the) digital medium. We have launched our Indian website and we think our investments are going to be better realized with digital development here.
How does the balance sheet look today?
The WSJ business is profitable and (the) rest of our businesses are profitable. The important fact is that 50% of the revenue for Dow Jones comes from digital and only 30% of our revenue comes from advertising. So our dependence on advertising is not so much. This is because we have lots of B2B customers.
What are the newspaper trends globally? Do all media have to move to online and mobile?
I think the great mistake that the newspapers have made around the world is to believe that it makes sense to give their product away free online with the belief that advertising will pay for everything. The truth is that the Internet is infinite and there are many, many different products and there are many, many different ways for the advertisers to reach potential customers.
So, as newspapers, we have to maintain the quality of journalism and reach; then we have no choice but to find ways of having users and readers. The Journal, and its ownership before us, was very wise in always believing that the paper and its journalism deserves to be paid for. We do give away content online, but we always attach value to it. Even in the times of financial crisis, we priced up our newspaper and our digital offerings. We were still able to strengthen our revenues, our readership.
What is your impression of the print media business in India?
Well, it is flourishing and it is like Europe some 30 years ago. You have got a fantastic society that loves to argue with itself and loves to argue over politics, sports, cricket in particular, and everything. It’s a fantastic environment for newspapers to exist and there is great promise. It is very competitive now and is going to grow more competitive once rules are changed allowing foreign investments.
Doesn’t Dow Jones make more money from B2B than its B2C (business-to-consumer) business? Will you focus on B2B in India?
Yeah. In India, B2B will be very important for us. We will focus on B2C as well, but our initial investments with the Journal will be looking at B2B opportunities first within India.
Where do you see ‘WSJ’ going forward in terms of business focus?
WSJ is a global brand. We have a European edition and an Asian edition in print as well as the American one. We have weekly investor magazines and we have Marketwatch.com, but I think in the developing markets such as India, China and Japan, we can see real and significant opportunities in many areas, significantly in the B2B area as well.