Thursday, February 23, 2006

Dow Jones Reorg: Zannino Creates a Content Company with Franchises

If you get a chance take twenty minutes to listen to's excellent Skype interview with Rich Zannino in which he outlines the consumer side of Dow Jones' reorg, which is a window into their overall thinking. The key factor is the pulling together of the various print and online franchises (WSJ, MarketWatch, Barron's) and operations under one organization that will use the various franchises as outlets for their core content creation capabilities. MarketWatch content will make its way onto, online content will makes its way into the WSJ print edition, and so on within the next few months. This brings Dow Jones operations in a more close alignment with other media companies that are learning to repurpose content through multiple franchises and begins to leverage MarketWatch capabilities in more premium channels instead of through low-value syndication channels. Rich points out that MarketWatch has become more profitable with less ad inventory and less traffic after deciding to forego renewal of a syndication deal.

On the financial side DJ has come up with a formula for reporting that allocates incremental costs (as opposed to fixed costs) for driving online content to the incremental revenues. Rich points out that reporting follows the best way of running the business, but it's significant that the measurements have been irrevocably shifted to a content company mix rather than a print-plus-online mix. Notably Gordon Crovitz and Clare Hart report into Rich on a peer basis and Rich sees no need for a COO to keep him away from these crucial changes. It looks like DJ shareholders are on the road to a renewed organization that will be much better aligned for profitable and growing operations. Tune in the MP3 audio for this interview here.
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