A rising tide raises all boats, so Wall Street wisdom goes.
The growing flotilla of investor-news providers supports that theory. A record high Dow Jones industrial average is fueling interest in cable TV channels and syndicated radio shows that focus on finance and the Los Angeles-based newspaper Investor’s Business Daily.
In a year when the largest daily newspapers lost readers, the circulation numbers in 2006 for Investor’s Business Daily show 2.5 percent more customers. A one-year subscription to the blue-and-black ink paper costs $295. The Audit Bureau of Circulations reports IBD has an average of 173,169 paying readers for its Monday-to-Friday editions.
IBD competes in an increasingly saturated niche. Earlier this month, Time Warner Cable agreed to carry any future Fox Business News Channel, making the long-gestating project a credible contender against dominant CNBC. The same week, ABC Radio Network announced syndication of an investment show hosted by Ric Edelman, a long-time radio personality in Washington, D.C. The show will launch in eight markets, including Los Angeles on KABC-AM (790).
The real financial news battleground has shifted to the Internet. IBD has a site called investors.com that competes against MarketWatch.com, a unit of Viacom Inc., as well as against TheStreet.com, whose main personality, Jim Cramer, is a CNBC fixture and whose latest book is riding the best-seller lists.
But according to William O’Neil, founder and chairman of IBD, the public’s hunger for investment news will continue to grow as the baby boomers approach retirement.
“What Fox is doing is on the mark,” O’Neil said. “Investment information, especially the right information, needs to get out to everyone.
“What we do at IBD is based on facts that have been tested and proven to be the key over the past 50 years. We study history and the most successful precedents.”
Indeed, IBD has a sense of mission that sets it apart from other financial media outlets. While executives say the company isn’t evangelical, it does promote an investment approach based on detailed historical analysis of successful corporations.
The newspaper prides itself on spotting great investments early from its IBD 100, a list of up-and-coming stocks.
New subscribers receive a complimentary copy of O’Neil’s book “The Successful Investor.” Many also attend investing seminars organized by IBD. Introductory classes start at $198 and top out with a seminar in Los Angeles on May 19-20 that costs $8,994.
“We’ve always had a loyal readership, and in the last few years a series of new features in our print edition, the electronic edition and the Web site have created even more interest,” said Kathleen Sherman, director of corporate communications. “We’ve kept our prices fairly stable, and we’ve offered different kinds of subscription packages to meet investor’s needs.”
According to a 2005 Mediamark Research study, the IBD audience skews male (72 percent) with an average age of 45 and a median household income of $94,270.
Advertisers take note when they hear that roughly 80 percent of IBD readers do not read the Wall Street Journal.
“Virtually all of our subscribers are successful professional people doctors, engineers, owners of companies, technology types, etc.,” said Ray Warhola, advertising sales director.
Stock market boost
The privately held company declined to reveal any numbers on ad revenues or column inch totals. However, Warhola said the major advertiser categories include financial firms, business services, technology and luxury automotive. He said advertising remains steady because IBD and Investors.com delivers high net-worth individuals.
But IBD together with its competitors enjoyed a boom in 2006, when the Dow Jones average passed 12,000 for the first time. The index lately hovered around 12,500, with record highs still making headlines.
It calls to mind the year 2000, the last time the market reached a high only to crash that spring.
“That year marked a serious downtrend and was a very challenging time for investors. Over 80 million people lost $7 trillion,” O’Neil recalled. “So we started an aggressive campaign to educate professional and individual investors on what was happening and what to do about it.”
