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Friday, April 15, 2005

Dow Jones Traditional Print Media Slips; Online Showing Gains

NYPost reports, Earnings plunged by 54 percent at the newspaper's parent Dow Jones & Co.,with its fledgling online operations earning more money for the first time than the flagship Journal and the weekly Barron's. WSJ says the slump on weak advertising at the Journal, which lost 8 percent of its ads in the first quarter and expects the slump to continue. The advertising problems at the financial publishing giant seeped into the market, as well. Kann, the publsiher expects to pick up more consumer advertising with a new weekend edition of the Journal being launched in September at a cost of more than $40 million. The company "doesn't earn enough to cover the cost of the capital they use - its average profit is 4.2 percent but the annual cost of its capital is 8.4 percent."Its growth rate is lower than other media in the sector — at 5.4 percent vs. a 7.7 growth rate for the sector. "They're simply losing market share to other media. Print publishing is not a profitable business for Dow Jones anymore," said Feinseth, an analyst. Kann, the publisher is hoping that the company's long-range growth also comes in online publishing, which has profit margins at least 20-fold higher than print.The Wall Street Journal Online is signing up thousands of new subscribers, up 5.2 percent for the quarter, to a total of 731,000. But some readers say they're just switching from buying the more expensive print editions of the Journal and Barron's to the lower-priced online versions. Interesting to watch - we covered sometime back the development, Internet surpasses radio in reach and rivals newspaper in the US markets.Surely the online media is gaining ground -what effect this can have on traditional media in the short run is an open question while trends are clearly favouring the internet media in the medium to long term.

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