If WSJ.com Went Free: Effect on FT and FT.com; CEO Ridding Allays Concerns

Last week we mentioned a research note by Lehman Brothers analyst Doug Anmuth, who did a detailed number-crunching and analysis of the scenarios if WSJ.com became open. Today, UBS analysts Polo Tang and Alastair Reid came out with a short note on the effect of this move on FT and FT.com. “We believe any loss would be limited given the Journal’s weaker European operations make it a less compelling substitute and the fact the majority of competition for FT.com in Europe already comes from free websites, unlike the US where online content is generally paid for.” [Ed: That’s point about U.S. is not true]

Also, the subscriber numbers for FT.com are minuscule, relatively: “FT.com currently has 100k online subscribers (vs. c900k for WSJ.com) paying GBP 6 per month. Even assuming a worst case scenario where all these subscribers were lost, there would only be a GBP 7 million impact, suggesting only 1 percent downside risk to group profits. Separately we believe that the FT remains a trophy asset and that Pearson would be able to crystallise significant value, should they decide to sell.”

Separately, in an interview with UK’s MarketingWeek, FT CEO John Ridding dismisses competitive concerns after the NWS-DJ deal: “The competition is not binary any more…There has been an explosion of new channels, resulting in a much broader competitive set. In all this, the WSJ has circled its wagons around the US while we are focused globally.”

The story says that the two brands are every different: WSJ may have two international editions, in Europe and Asia, which stretch it across the world but it is far from being a global brand – the mass of its readers and visitors reside in the U.S. While FT “is quintessentially a global brand which prides itself on catering for a carefully selected affluent niche audience,” though of course online, who cares. Also, as the story says, the real question for tomorrow is: “however competent, can Ridding or any other chief executive future-proof the FT against a newly invigorated WSJ under Rupert Murdoch? Andrew Neil – admittedly a hostile observer with intimate NewsCorp connections – believes that Murdoch will ‘blow the FT out of the water’ by challenging its supremacy in Europe.”


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