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News Corp Has Said Its Wall Street Journal Would “Crush” The Financial Times, But The Pink One Has Its Own Game Plan And It’s On A RollHardly a day goes by that the UK’s Financial Times isn’t making some sort of expansion announcement. It began publishing a Gulf edition Tuesday, it has says it will launch a Chinese-language magazine aimed at China’s growing business elite, it has relaunched its very successful Saturday edition, and, oh yes, besides its global circulation rising it has just won the prestigious UK Newspaper Of The Year Award.So it’s looking increasingly likely that News Corp. President Peter Chernin may well have to eat his words of last year when, asked if the company was interested in buying the FT in addition to Dow Jones, he blurted, “We don’t want to buy the FT. News Corp. will crush it.” The FT is well embarked on its strategy of building a global brand. It has given up Recoletos in Spain, Les Echoes in France, its 50% stake in FT Deutschland in Germany, and it is ending its 15-year relationship with India’s Business Standard, selling its 14% stake in the newspaper in preparation for starting a new business daily in India with a local partner. Under current Indian law a non-Indian entity can only own up to 26% of a newspaper although FT executives have been busily lobbying Indian government ministers for the past couple of years to scrap that rule. The FT’s Asian edition is also on sale in India. Global circulation is holding up well although March gave the first monthly decline after 10 straight months of increases. Globally it sells 454,937 copies but to put that in perspective, the WSJ in the US alone sells 2,069,463 copies daily. On the other hand, although the FT is a British newspaper its largest geographic circulation area is the US where it averages 151,474 copies daily. If it has a problem market it is its own home turf where circulation for the UK and Ireland is 140,724, but only 88,207 of those are sold at full rate and the rest are bulk sales. The problem the FT has at home is that the business sections of the UK quality national newspapers have improved tremendously over the past few years. Whereas it used to be that if you wanted any detailed financial news then you had to go to the FT, but now The Times, The Telegraph et al have very respectable business sections of their own and for the average reader interested in the day’s basic financial information plus interviews with business newsmakers then the general interest newspaper does just fine and no need to buy the financial specialty newspaper. Perhaps with that in mind the FT has “refreshed” its Saturday edition which is already by far its best selling day – and its most expensive sale at £2 a copy whereas other days the paper sells for £1.50. The FT is taking advantage of a trend in UK national newspapers that the Saturday paper is becoming about as thick as the Sunday paper and that the weekend read is now starting on Saturday since Sunday is no longer the day of rest and going to church but rather one of shopping and going to sporting events. And cleverly the FT names its Saturday newspaper FT Weekend. On Saturdays the newspaper attracts a very new and different audience – its own research says 65% of the Saturday readership does not read the daily newspaper and its Saturday circulation is about 30% higher than the rest of the week. While it does not have a Sunday edition it is encouraging Sunday readers to try its Weekend read. Its expansion this week into the Gulf will mark the newspaper’s fifth edition (others are UK, Continental Europe, US, and Asia), The edition will feature twice a week extra pages devoted to Gulf business and finance, particularly investment in the region. The FT’s chief executive, John Ridding, said, “This edition is a further step in our successful global strategy, reflecting the rapidly deepening interface between the region and the international economy. It will provide a further boost to our global circulation and a quality advertising vehicle for businesses seeking to reach senior decision makers in the Middle East.” And that last statement is the key to the FT’s expansion. Its research makes clear that much of its readership is at the boardroom and senior government level. A full page ad in the new edition will get the attention of those with the money to invest. The FT has printed about 4,000 copies of its European edition in Dubai for some four years and thus it is likely 4,000 will be the initial run of the new regional newspaper although the business plan probably calls for tripling that within a relatively short time. And with its eye on the Beijing Olympics, the FT says it is going to launch a monthly magazine in Chinese aimed at China’s wealthy. “It will be a quality lifestyle and wealth management title and we hope readers will find it informative, useful, and entertaining,” the FT said. It currently has the working title of Rui (Intelligence) and will be printed in Hong Kong which means it will need special approval to be distributed on the mainland. The FT already operates a Chinese language website edited from London. All of this expansion is a far cry from a newspaper that was doing very poorly financially for a few years – in 2003 alone it lost some £32 million -- and investors in Pearson, its owners, were clamoring for management to sell. But with a new editor and management team turning things around the company boasts that last year FT Publishing saw operating profits of £153 million. Twice within six months it raised its newsstand price a total 50% to £1.50 on weekdays but that had no negative effect on sales – obviously those who buy the FT don’t notice an additional 50p a day! But the FT cannot afford to take its eye off what the WSJ is up to. It has not been bothered much by the tabloid Wall Street Journal Europe but now under Murdoch the WSJ has started printing some 3,000 copies of its US edition daily in London, targeting the financial centers and the airport and it is hinting it might expand that circulation to the European continent. A multi-sectioned WSJ could cause a problem even though its selling price is £1 more at £2.50. The likelihood is that those who really depend on the FT won’t drop it for the WSJ in Europe, but some may well make the WSJ an additional read. No doubt FT management will be keeping a close eye on what the WSJ gets up to. After all, Les Hinton and Robert Thomson, who now run Dow Jones and the WSJ, know the London market real well, they have an international outlook on business, and they would like nothing more than to expand the WSJ’s global brand. Should be interesting financial times ahead.
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