European Media Seek U.S. Pot of Gold

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For McCall, this strategy remains "low-risk," despite the prospect of increased competition with the likes of The New York Times (NYT) and The Washington Post (WPO). Yet some media analysts caution that European publishers can fall on their faces if they get too ambitious in the huge and saturated U.S. market.

"The problem is when European media outlets go after the mainstream U.S. audience," says Paul Zwillenberg, head of the media practice at London-based OC&C Strategy Consultants, who argues that targeting niches is a wiser bet. "Operations like The Guardian, which already has a presence in the U.S., can be successful by expanding their existing products."

News-Hungry U.S. Audience

That's the approach taken by The Times, owned by Rupert Murdoch's News Corp., which took the unusual step in 2006 of launching a U.S. print edition distributed solely in New York and Washington. According to editor Robert Thomson, the newspaper's North America edition taps into growing interest for coverage of global current affairs. "U.S. readers want and need sophisticated global political and economic coverage," he says. The Times also has revamped its Web site to entice more international readers.

This increased focus on a U.S. audience isn't just limited to newspapers either. The enduring BBC—affectionately known at home as "Auntie"—has thrown down the gauntlet to its American rivals by expanding its 24-hour news channel, BBC World News, to compete in the U.S. against CNN (TWX) and Fox News (NWS).

The strategy comes on the back of the runaway success of the BBC news Web site, which pulls in 6.4 million unique U.S. visitors each month, according to London-based Internet researcher Nielsen//NetRatings. So far, pickups of the BBC's 24-hour news channel have been confined mainly to cable operators in the Northeast. But the company remains hopeful about extended distribution. "We have seen a real interest in international news in the U.S.," says Jeremy Hillman, editor of BBC World. "There's a large appetite for the sort of news we produce."

Research statistics suggest as much. According to a study by Virginia-based Luntz Maslansky Strategic Research, 47% of those polled in the U.S. rated international TV news coverage as either fair or poor. Among sources of global news coverage, respondents ranked BBC highest for credibility and No. 2 for reputation, after CNN. Rivals such as Fox, MSNBC (GE), and local news shows were far behind.

"If BBC World News targets a specific market, rather than catering for a mass audience, it could be quite successful," says OC&C's Zwillenberg.

Translating Success into English

The appeal of the U.S. market hasn't gone unnoticed by other European media companies, some of whom are trying to push into English-language media to grab new audiences in the U.S. and other English-speaking countries. The most successful to date has been German weekly news magazine Der Spiegel (a content partner for BusinessWeek.com), whose English-language Web site, launched in 2004, has seen rapid growth.

According to Mathias Mueller von Blumencron, Der Spiegel's online editor, the expansion has been key not only to increasing the magazine's brand presence overseas, but also to boosting online advertising revenue by targeting English-language consumers. "By expanding our activities, it has given us a chance to show our international audience that we are a voice from Central Europe with a specific point of view," he says, adding that almost 1 million of Der Spiegel's estimated 5 million unique monthly online visitors also read the magazine's English-language Web site.

Despite such bullish talk, success in the brutally competitive U.S. media industry is by no means assured. Last year's $4.6 billion sale of the Knight-Ridder newspaper chain to the McClatchy Co. (MNI), as well as the recently agreed-to $16 billion buyout of Tribune Co. (TRB), demonstrates the perilous state even of well-entrenched media firms as they adjust to declining circulations and the growing impact of the Web.

It's a tough time in the media business, and everybody is looking for growth outside their shrinking home markets. For European media giants, America is too tempting a target to overlook. But some are bound to get burned trying.

Scott is a reporter in BusinessWeek's London bureau.