WSJ has a good analytical piece on how Dow Jones Newswires, the low-profile but much more profitable unit of Dow Jones, could face tough competition if and when the Thomson-Reuters deal will go through. Add to that the complication of News Corp bidding for DJ.
DJN publishes business news and data but, unlike Reuters or Thomson, doesn’t distribute it directly to institutions…it makes use of third parties — like Reuters and Thomson — which are the two largest distributors of DJN content. Bloomberg, the leader in the field, also sells its content directly to clients through its Bloomberg terminals….A combined Reuters-Thomson could offer special deals and packages to clients that include the Reuters news service. With Reuters newswire added to its stable, Thomson could be less likely to distribute content from Dow Jones, the story says.
Refuting that, Clare Hart, president of Dow Jones’s Enterprise Media Group, said clients have always chosen DJN despite other offerings and that shouldn’t change. DJ argues that “the vast majority of Newswires revenue comes from clients under contract directly with Newswires,” indicating that those clients will want DJN content regardless of how it is distributed. Factiva, which DJ bought fully from Reuters last year, could also be helpful in competing against the giants: it promises to add an additional $300 million in revenue to the Enterprise Media Group.