Will Journal's New York section hurt NY Times?

Posted by Savita Sauvin on March 3, 2010 at 3:34 PM

The Wall Street Journal's New York section, set to launch in April, will compete against The New York Times for local readers and major advertisers, a cause for concern at The Times. Although capturing maximum readership, attracting advertisers and creating a solid customer base will not be easy for the Journal, it also means that The Times has something to lose, while the Journal is looking at a tremendous opportunity, AdvertisingAge reported.

Sources "close to the situation" told Ad Age that The Journal's New York section is expected to include coverage of New York's sports teams, as well as reports on culture, news from City Hall and even state government coverage from Albany, according to AdAge. The Journal is expected to chase advertisers and the paper might eventually hire sales staff for the metro edition.

Rupert Murdoch, Chairman and CEO of News Corp., which owns the Journal, announced the launch of the section yesterday. Although he did not mention The Times by name, he said that "a certain other New York daily has essentially stopped covering the city the way it once did and instead has focused on being more of a national newspaper interested mostly in prizes."

Parting with ad revenue is likely on the minds of executives at The Times. Bloomingdale's and Bergdorf Goodman, large department stores that will be advertising in the new section, have a history with The Times, AdAge pointed out. According to estimates from Kantar Media as reported by AdAge, Bloomingdale's spent US$17.9 million to advertise in The Times last year, and less than $1 million on the Journal. Ad spending by Bergdorf Goodman was about $1.4 million on The Times last year and apparently nothing on the Journal.

Bloomingdale's operates stores across the United States with many in the New York area, while Bergdorf Goodman has no stores outside New York.

Considering the current state of the traditional retail industry, stores are not likely to increase their ad spending to accommodate the Journal's new section, Meghan Keane wrote for the eConsultancy Blog. The Times has also been reducing its coverage due to budget constraints, and last spring the paper closed its standalone City section, resulting in significant job cuts, she pointed out.

However, Scott Heekin-Canedy, president and general manager of The New York Times, told AdAge that The Times' New York coverage "commands a deeply loyal and engaged print and Web audience in New York and is almost three times the size of the Journal's." He added: "Our advertisers know the difference and will continue to market to this engaged, outstanding audience."

Rick Edmonds, media-business analyst at the Poynter Institute, told AdAge he doesn't think the new section is a threat quite yet, "but I suppose there are metro readers for whom the New York Times is a second read after the Journal." It seems only "Time will tell just how much of a difference there is," Molly Fischer wrote in the Observer.