Paul Ingrassia

Expansion and convergence

Interview with Paul Ingrassia
April 22, 1997
Rick Alloway, Interviewer

Paul Ingrassia, executive editor and chief operating officer of Dow Jones Newswires for the Dow Jones Company,visited the college in April, speaking to students about the ways financia l news is covered. He also spoke with broadcasting professor Rick Alloway, about his experiences and observations regarding changes in the news business.

Q Why don’t you tell us a little bit about what we can expect to hear this afternoon in your address. What’s one of the hot buttons you hope to press this afternoon?

A Well, there’s a real revolution going on in the news and information business that has to do with electronic delivery of news and information. Perhaps it can best be summed up by the example of the Wall Street Journal, a newspaper published by my company, Dow Jones. The paper is more than a hundred years old, but last year we launched a new version called the Wall Street Journal Interactive Edition. It’s published on the Internet and, as a matter of fact, just this month it has passed the 100,000 paid subscription mark, which makes it the number one, the highest paid site on the Internet, which is pretty exciting.

In my particular part of the company, the Dow Jones Newswires, we deliver news and information to financial-market professionals around the world on a real-time basis because markets move globally and instantly these days, and there’s really quite an explosion of opportunities. In my particular unit of the company, the Newswires, we’ve hired 100 new journalists a year for the last three years.

Q So the expansion is quite rapid and also global?

A Absolutely. A lot of the reporters we hire work overseas, so they need language skills, certainly, to do that. We have big offices in Tokyo, London, Singapore, Hong Kong. Frankfurt is also a very big financial capital for us.

Q I want to get back to the Internet properties here in a little bit, but let’s talk first about your specific background because you mentioned reporters; that was your training. You have been with the Wall Street Journal since the late ’70s. When you were at the age where a lot of our audience members are now as college students, what did you foresee as your future in our industry?

A I just wanted to be a good reporter, essentially. My background is not terribly unlike what the backgrounds of a lot of the students here at Nebraska might be. I come from a small town in a rural state. In my case, it was a town in southern Mississippi, and I went to a large Midwestern state university -- in my case it was the University of Illinois -- and I worked for the student newspaper there. I really got interested in journalism by working for the student newspaper. I got interested in business journalism just by picking up stray copies of the Wall Street Journal around the office occasionally and reading them and thinking, gee, it sort of looks stodgy and gray, but there’s a lot of interesting stuff in here about some of the drama that goes on in business.

My first job out of school was at a small chain of newspapers in Decatur, Ill. I joined the Journal in 1977 in Chicago and was a reporter for the Journal for about 18 years before I moved over to the electronic side of the company.

Dow Jones as a company is really in the middle of a broad transition from a print company with what you might call some electric side-line businesses to a true multi-media company. For example, the global staff of the Wall Street Journal is about 500 reporters and editors right now, and we have about 650 on our electronic newswires. That’s really doubled (that 650 number) has doubled over the last three years.

Q Even though the delivery systems have changed and continue to change rapidly, do you feel that basic reporting, writing, editing skills that you learned as a student have served you well throughout this time?

A Oh, absolutely. The five “Ws” and a premium for accuracy and also integrity, intellectual honesty, questioning yourself. I find that when you do an interview, news sources sometimes will say, “Gee, you’re coming in here with a preconceived notion of what the story is.” I always say, “You know, you’re right. I plead guilty to that. I do have a preconceived notion. I call it something different; I call it a hypothesis.”

But one of the tests of a good journalist, I think, is being willing to subject your hypothesis to reality and being willing to change that hypothesis if the facts warrant. But you have to have a hypothesis to start out on a story. Otherwise, you wouldn’t come in to ask somebody any questions to begin with.

Q You also have a master’s degree from Wisconsin-Madison. Did that come right on the heels of your undergraduate degree, or did you work for a while first?

A No. It came right on the heels of my undergraduate degree. Actually, I majored in journalism at the University of Illinois, but I really majored in working on the student newspaper, and I just really wanted to take a year to be a student and not work part-time -- or really what amounted to full-time. I was fortunate enough to be able to do that at Madison.

Q You started with the Wall Street Journal in the Chicago bureau and quickly moved right along, becoming a news editor and moved into the Detroit bureau as well. The progression was steady. Did you see yourself as always wanting to be an editor and being in charge of a group of other people, or did that take you too far away from the street and being able to do the things you liked in terms of interviewing and reporting? Or did you get to still do both?

A I can do both, actually. The great thing about the Journal’s bureau system is that, when I became an editor, I was a bureau chief at the Journal, but the offices are small enough that I still got to do lot of reporting as well as editing. A Journal bureau chief is almost chief correspondent in the bureau, so while you are editing the copy written by other reporters, you’re also doing a lot of your own reporting and writing -- which obviously is the joy of the whole thing.

I still actually do that. Dow Jones, as part of its multi-media expansion, has a very successful new magazine called Smart Money, a personal finance magazine, and I still review cars for Smart Money. I write a car review for Smart Money every other month.

Q Somewhere along the line, reporting on the automotive industry became sort of your beat, did it not?

A Yes. I was transferred to Detroit in 1985 by the Journal, and when you’re in the Detroit bureau, if it doesn’t have four wheels, you don’t write about it.

Q That seemed like a pretty obvious lead there. And that led eventually to reporting that eventually led you to sort of the grand prize of folks in the journalism industry, the Pulitzer Prize, on the reinvention of General Motors and some of the struggles they were going through. Tell us about that. How did that materialize for you?

A I was fortunate enough to be in the right place at the right time. General Motors was a company that had made one series of disastrous management mistakes after another in the 1980s. By the early 1990s there was a real question whether the company was going to continue to exist in its shape and form as currently constituted.

At that point, the board of directors stepped in and took active control of the company and groomed out, if you will, a whole generation of senior executives and put in a bunch of people who were in their early to mid forties, even late thirties in one case, as senior management. I think it really marked the end of an era.

For us, this wasn’t just a dramatic story about one company. It really marked the end of an era in American business where the forces of international competition and technological change forced corporations to change more radically and more rapidly than they had in the past. And a lot of companies, big successful companies, were not up to that. IBM went through a similar thing a few years later. So did Westinghouse Electric Company and many other major blue-chip names in American business. So we approached it as a story about the dramatic events at General Motors but also as a sea change in corporate governance in the United States, which I think was a little bit different from the way the rest of the press looked at it.

Q General Motors is a metaphor for what was happening in the larger market?

A Yes, exactly. Kodak, another company, went through a similar sort of situation.

We got a little bit lucky. My colleague Joe White and I, who covered the story for the Journal, portrayed this as a revolution in corporate governance, and within about six months after we had written/portrayed the General Motors events this way, we wrote about similar things that happened at IBM, Eastman Kodak, Westinghouse and other major companies.

Q Tell us about the process of the reporting that led to the prize for best beat reportor. If there is any one organization that sort of epitomized the monolithic, “We’ll do whatever we feel like it” kind of attitude of American industry, it was General Motors. Were they open to talking with you, knowing some things were likely to come out about the struggles the company was having that were not necessarily positive?

A When you say “they” you’ve got to define who “they” is. We were able to find a lot of people in various ranges of the company, from the executive suite to middle managers and shop-floor workers, who were willing to talk with us on a straight and level basis.

This did not come easily or overnight. By the time these dramatic events of 1992 had taken place, I had been in Detroit seven years as a reporter covering this company rather intensively, and there would be many nights when I would come home late from dinner meetings with sources or take off early in the morning for breakfast meetings with sources and that sort of thing. One of the things we really worked very, very hard on was source development and trying to find people who could shed light on the dramatic events at GM.

Q Was management a little bit different to deal with? Were you getting the corporate view of things from the management people, or did you also have enough sources in various levels of management that you could get a really true picture?

A Absolutely. We did have sources in a whole variety of levels. Obviously, there was sort of the official party line, which was obviously worth hearing, too. You know you owe it to the company to listen fairly with an open mind to all that. But in addition, we were able to also find some people who would maybe let their hair down a little bit in the senior management and the executive ranks and talk with us.

Q I like your metaphor about developing the hypothesis and then being willing as a reporter to say perhaps your hypothesis was wrong. Let’s go back and float a different one. What was the hypothesis you had developed when you started this story? What had it evolved into? And did you wind up proving tha,t or did you make some modifications in it?

A In the GM case, the hypothesis was that this company had made a series of disastrous mistakes and that its very existence was threatened unless there was a radical intervention by some outside party. The outside party turned out to be the board of directors, which was sort of an inside party but wasn’t inside management. That held up pretty well.

But subsequent to all those articles on GM, I took a sabbatical for about nine months and wrote a book with my colleague Joe White. The book was titled Comeback: the Fall and Rise of the American Automobile Industry. It was published by Simon and Shuster in the fall of 1994.

The original working title of that book was Changing Hands, and it was about how the American auto industry was about to pass into Japanese hands because the Japanese companies in the late 1980s even into the early 1990s were rolling right over Detroit. But the truth is that once people woke up and really got serious about adopting and adapting new management and production and product development methods in Detroit, a turnaround occurred in a fairly prompt period of time, even though the groundwork that led to this turnaround was a long ramp up. It took a lot of changing attitudes. But in that case, we totally changed our hypothesis and the result was the book Comeback.

Q I think the process you’ve just described -- about changing your hypothesis -- is a nice lead-in to talking about how the need for rapidly-changing, accurate information is so important and also so much more possible today because of all the various forms of electronic communication that are available. And certainly the Wall Street Journal and its various products have changed to accommodate that increase in the amount of information, the speed at which information travels. One of your main tasks in the last few years has been to develop some of those new kinds of products and new kinds of information. What have your clients and your customers told you about the new kinds of information and the delivery systems in which they want that information? What are you hearing?

A One of our editors has a saying that is sort of a seeming contradiction in terms: We worship at the altar of accurate speed. And that’s really what delivery of real-time news is all about. It’s a great statement. I think it sums up a lot.

When you think about it, accurate speed is a contradiction. When you’re working for a newspaper, you face deadline pressure, no question about it. But you generally have a period ranging from a half hour to several hours to write your stories, and I would have several days or even weeks at the Wall Street Journal on some larger feature stories I was working on.

But the production of financial news for global financial market professionals really is sort of a different matter. People want it now. They want it accurate because a financial market professional will, depending on which way the consumer price index number turns out, buy bonds or sell bonds instantly, and he’ll buy or sell hundreds of millions of dollars of bonds with a single press of a button, as amazing as that is to believe. It’s not unlike the way the commodities markets work, which may be a little bit closer to home to your students here.

The truth is that if you get that number wrong, someone’s got a big problem out there. And if you get it wrong too often, you have the problem because you get a lot of canceled subscribers. So I think a couple of things are new about it. One is that in addition to that accurate speed, readers also want accurate quick analysis of what something means right now, because everyone is suffering from information overload. And the other thing is a whole range of timely delivery systems: You have newspapers the next day, you have newswires which are virtually instantaneous, and then you have “real-time,” which didn’t exist when I was in school.

And now you have something even in between, called “near-time,” and that’s really what our Wall Street Journal Interactive Edition is all about. Instead of publishing every morning, they publish every couple hours on the Interne, so they take news from our newswires that we report, and they do a little additional in-depth reporting and publish that every couple hours. There’s a whole range of media out there that really just didn’t exist until a few years ago.

Q I think journalism students have had a fair amount of anxiety in looking at the Internet and other sorts of media dissemination vehicles and saying, “Gee, is there a role still for us if people can bypass the media and go directly to all these kinds of sources and get all the information they want? What’s the role of a journalist?” But yet I think one of the key points you hit on was there’s still a need for analysis because of information overload, so where do you see the future of journalists in this global, international, media-convergence?

A I think it’s incredibly bright. I think that there is a need and desire for more and more information, and it can be a little daunting. I can understand that your students are worried, but the truth is, if you really want valuable quote content, the kind of stuff that can really shed light on something, you’ve got to have an intelligent human being out there producing it. There is a lot of stuff on the Internet. A lot of it’s good; a lot of it’s junk. But the stuff that really adds value to people’s daily lives is stuff that you get a trained professional to produce.

Q Plus one of the things we try to impart to students is the need for fairness. When you go to a Web site put up by who knows whom, you don’t know what you’re getting in terms of accuracy and fairness. That’s still a reason people go to the Wall Street Journal in any of its forms, or any of the Dow Jones products. They’re paying for the analysis and also for the mantle of fairness. As you pointed out in your story about General Motors, you need to get both sides in order to give people the whole picture.

A Well, certainly. Your brand name -- in our case the Wall Street Journal or Dow Jones Newswires -- stands for something. It’s just like when you go to the clothing store and you buy a suit from Brooks Brothers or you buy Guess jeans; that stands for something. I think the key to producing value is to have a publication -- a brand -- that really stands for the quality and integrity you’ve put into it. It’s not all just blips on a screen, you know. There’s a difference here.

Q What’s the most exciting part of your work right now? What innovations have been the most exciting for you to deal with?

A I think watching the global financial markets develop in some emerging markets. A few years ago we would not have needed many reporters in Latin America or Eastern Europe because there were not free and open markets there that really had much to do with any place else in the world. Now they do. That started a new wire a few years’ ago called The Dow Jones Emerging Markets Report to focus just on investment opportunities in these emerging markets.

One of the more exciting things, frankly, is the development of a whole new market in electric power. As electric power becomes free and deregulated, it’s going to be traded more and more like a commodity like corn or wheat or treasury bills or whatever. It’s already happening. We started our coverage of electric power as a commodity two years’ ago. We now have a staff of about a dozen reporters in the U.S. alone that cover just electric power as a commodity: transactions, buying and selling of it, trading of it. And just last fall we also started up a service in Scandinavia, the Dow Jones Nordic Power Service, because power is a freely-deregulated market in the Scandinavian countries. That’s the other area of the world where this is very advanced -- in fact, even more advanced in some ways than the U.S. -- so we have a staff of four or five journalists up there now who cover electricity.

Q So there are opportunities all over the world for folks to work for your organization and others like yours.

A Yes. And language skills obviously are important, although it’s interesting that our Nordic Power Service had a choice of what language to publish in, and we published in English because that’s a common language among all the Scandinavian countries. If you’re Finnish or if you’re Norwegian, you can still relate to English, where you might not be able to relate to Norwegian if you’re Finnish.

By and large, though, reporters do need to know the languages of the countries they’re working in. We also publish Newswire in Spanish. We have a new service called “Servicio Dow Jones” -- our Spanish language wire -- we have one in Japanese and we have one in Chinese.

Q Our students in journalism who are required to take foreign language will take heart in the fact that there is perhaps some practical application to that besides just the traditional liberal arts background.

A Absolutely. Let’s be blunt about this: Foreign languages in today’s world are a marketable, bankable skill.

Q What other kinds of skills do you look for in the people you hire? What kinds of things do you like to see in terms of practical experience and educational background?

A Obviously, we want a college degree, but whether it’s from Harvard or some other place isn’t really the issue. The issue really is the individual. I think personal integrity counts very high on the list and also just a hunger for breaking news and telling stories and intellectual curiosity, a lively intellectual curiosity about the subject matter you’re covering. We have a saying around the office that one of the things you want to look for is a “young hungry,” if you will. Young hungries don’t all have to be 23 or 24, by the way. It’s sort of a state of mind and a state of heart, but we want someone who has a real hunger and a desire to shed light on things

Q I like to hear you use the term story-telling, because that’s one thing we continually tell all our people regardless of which department they’re in, advertising or news-editorial or broadcast. In any of those areas being able to tell stories and relate information well is the core skill. The delivery systems will change, the ways in which information passes will change, but the essentials of good story telling remain the same.

A That’s exactly right. One of the real skills in story-telling is not so much knowing what to put in the story but what to leave out, how to cut away the irrelevant materials and focus on what the person wants to know or what can shed light on a situation. I think that’s a skill that’s very important. It’s something you learn as you go, and you get better by doing it.

Q We’re dealing a lot in our college with the theory of the convergence of the media and how traditional text styles are merging with audio and video; obviously the Internet and the Web are a manifestation of that. Your company is also branching into more broadcast ventures. Tell us a little bit about what’s on the horizon there.

A Dow Jones is a very multi-media company. I think it’s the only company, really, that has newspapers, magazines, electronic newswires, Internet publishing and radio and television all in its portfolio. We have a successful business news channel in Asia based in Singapore, called Asian Business News. We have a newer, similar operation in London called European Business News, and we recently launched a business and local news and information station and sports station in New York by purchasing what used to be the public television channel for the City of New York. This was about a year and a half ago we bought this, and about three months ago we began our programming. The delay in that time was basically waiting for the FCC to approve the license.

Q It works at a glacial pace sometimes.

A Yes. It does not work in real time. That term has not been invented there yet. Not even your time. Anyway, we’ve now started programming in New York on station WBIS, and it’s something we hope to take national in some form, whether it be cable or satellite. We have to feel our way as we go in this.

Q You mentioned the increase in the number of subscribers you have and that you now have if the most popular subscriber site on the Internet?

A The highest paid site on the Internet is the Wall Street Journal Interactive Edition.

Q You seem to have conquered one of the challenges of Internet Web site development, which is how to make this thing pay. A lot of companies who started off with large investments in Internet Web sites have now either scaled them back or eliminated them because they could not see the financial reward in them. How did you figure out what people were willing to pay for versus what they were willing to try to get for free and not pay for?

A We did a lot of studies about the price level here. We thought a reasonable level to start with would be $50 a year. Don’t forget this is also advertising supported, too, so we draw in revenue that way.

I think also the key to it was really just adding value -- proprietary content -- that really helps people understand what’s going on in the world of business and that they can’t get elsewhere. We also added a lot of handy features, sort of personal clip files. So if you have a subscription to the Wall Street Journal Interactive Edition , you can have news about the companies or subjects your interested in automatically fed into your clip file while you’re off line. When you open it up, you can track your own investments and that sort of thing.

Now I wouldn’t say we’ve conquered this whole issue of paying on the Internet yet. Our on-line edition is very successful; we have 100,000 subscribers in our first year. But one of my favorite sayings in life is that you can always tell skill from luck by its duration. So just give us a couple more years to check out renewal rates and all that sort of thing. But we’re highly optimistic.

Q What do you tell potential subscribers or potential readers of the Wall Street Journal, or some of your wire services about why they should be concerned about business news and financial news since it does, to some people, seem to be sort of a niche area? They might say they’d rather read about the fact that the Cubs finally won a couple of games. How do you tell people they should also be concerned about what’s happening in the financial markets

A For our newswires it’s not really a problem, because those are aimed at financial professionals. Frankly, they’re high-cost, high-ticket items people need to do their jobs.

Q But you’re obviously interested in this as a background, so when you go to dinner with a bunch of people who aren’t necessarily interested in financial news, how do you tell them this is important stuff and they should pay more attention to it even if it’s just the financial section of your daily newspaper.

A I think the answer is essentially that the world economy has become something that affects all our lives, no matter what line of work we’re in. Capitalism has won over communism, and markets are opening up around the world for personal investment opportunities that affect geo-political events in enormous ways. I don’t think it’s a niche subject anymore. It’s on the front page of a lot of your daily metropolitan newspapers. The New York Times had a front-page story in my paper on Sunday analyzing what Allen Greenspan, chairman of the Federal Reserve Board, meant when he talked about the irrational exuberance of the stock market. This is the front page of a metropolitan paper. This is not the business section.

Q We try to help our students see that it’s important for them to analyze how what they do at any level fits into the business package of this for-profit organization for which they work. That orientation early on can help them at whatever level of business they decide to work.

A That’s absolutely true. When you can relate the process of communication to the business world, you certainly have a leg up on your competitors in the job market.

Q Have you had much experience with access to federal records, governmental records or dealing with political or governmental folks in terms of freedom of information?

A A little bit. Essentially, I was a corporate reporter covering large American corporations, so I wasn’t really down at the courthouse pulling records out on police subpoenas and that sort of thing. Certainly, in covering major corporations there are regulatory documents that companies are required to file with the government that are great sources of news and information. Corporate annual reports are among them. There is also a more detailed, slightly more technical but also quite valuable version of the annual reports, called the Form 10K, filed with the Securities and Exchange Commission and required to be made public. And these things are very easily accessible.

In the auto industry, there were a lot of safety-type issues for which records could be found in Washington at the offices of the National Highway Traffic Safety Administration. So I always found that the biggest obstacle to finding and getting hold of government documents wasn’t some sort of roadblock or Freedom of Information Act thing; it was really justreporter inertia. People just don’t take the time and trouble to either get the documents or, once they get them, to read through them. That, I would say, is 90 percent of the battle.

Q How are we doing on the health of the First Amendment and its relation to the Internet and some of the new technologies that have far outstripped government’s ability to regulate them? We’re obviously looking at the Supreme Court’s hearings on the Communications Decency Act and things along that line. But from your perspective, from your side of the business, is the First Amendment in good shape in terms of all these new technologies?

A I’m concerned. I don’t think the new technologies are just the issue. About a month ago, Dow Jones/the Wall Street Journal, had a Texas jury hand down a $225 million libel judgment against it on a story about a fund-management operation that went out of business. The truth is that we think that verdict will be either set aside or dramatically reduced upon appeal. But to have an award of that size, which is more than five times the size of any previous libel judgment ever issued in the history of the United States on what was, frankly, a relatively uncontroversial story, does worry me.

I’m worried about the public’s perception of what the press is all about and what it does. I do think we have an obligation not to be arrogant, to be fair and to conduct ourselves personally and professionally like that at all times. But I am concerned about our reputation and the public’s perception of the press at large.

Q What did the decision swing on in that case? Why did the jury find to the degree that they did?

A Basically, it hedged on various points of testimony. There wasn’t any one particular thing that threw this against us, but this firm had gone out of business, and there was no doubt about that. We certainly believe it wasn’t our article that put them out of business. Their major client had withdrawn its business from this firm for other reasons, which is something that we reported but that was really an issue that was unrelated to our article. And when they lost their major client, they lost their business.

That’s business.

Q Yes. That’s what happens. It’s the tendency to blame someone -- but not the guy himself.