WSJ to Retain Pay Wall? Not for Long
The big news out of Davos on Thursday was Rupert Murdoch's pronouncement that the Journal would continue to keep at least some content behind the pay wall. According to Rupert:
The really special things will still be a subscription service, and, sorry to tell you, probably more expensive.
The arguments in favor of doing so are twofold: first, you've got $70 million in subscriber revenue to replace if you kill it; second, that the pay wall creates a higher demographic for selling advertising.
I'm not sure what's driven him in this direction, as all signs pointed to tearing down the pay wall and making the Journal free. While it's possible they could move forward with a hybrid model, I think that it's already been shown that model does not work. The Times killed Select and I have tremendous doubts about the FT's current approach where users can get 30 page views per month for free, but must subscribe if they use it more frequently.
I am a current WSJ Online subscriber. I also get the NY Times delivered in print (I need something to read on the train platform). A few times a week I will read an FT article. Of the three, the Times gets the bulk of my page views and it's the only one of the three that I will typically link to. If the Journal keeps large chunks of their content behind the subscription wall, they'll continue to limit the growth of their brand.
So I don't think that's what they're going to do. If you parse out Murdoch's quote, he doesn't say that the Wall Street Journal will remain a subscription product. Instead, he says that "the really special things" will be a pay service. So, what's really special? Not the business and financial news, most of which is a commodity. There's no chance that he will put their editorial page commentary behind the pay wall as the Times tried. Clearly, Murdoch views the Journal editorial page as a means of projecting his views, not bottling them up for a select audience. So, in re-reading his comments, I think that we're likely to see the majority of the Wall Street Journal become free. At the same time, I expect them to build out some new capabilities - perhaps tools and data-driven applications, and put a premium price on those.
What do you think?
Barry: You're right. It's almost unfathomable to imagine Rupert Murdoch as half-pregnant (please...nooooooo), but that's the solution that seems to be evolving. Yes, as a former colleague of mine liked to rant: Proof of Failure. Times Select made sense -- on a white board -- and it did pull in $10M, but it was fatally flawed. The flaw, I believe, is just your man-on-a-train metaphor. The man on a train wants to get to stuff, and he or she is confused about what is going to be free (most everything) or paid or otherwise barriered. His pick and the navigation is easy: free. That's why I think Times traffic has exploded since the end of Times Select. It's not that so much more content became available, but the Times ended confusion. It made it simple. Come in, sit down and read.
My suspicion is that Murdoch's hemming and hawing on this subject has as much to do with the threat to print subscription revenues -- the Journal gets an above-average percentage (more than 30%, compared to an average of 20-25%) of its revenue from circulation. Once you make wsj.com free, you remove a reason to continue subscribing to print -- that's partly rational, partly irrational -- but I think plainly true.
So it's not just the $70M online sub revenues at stake, but the more than $300 million in print circ as well.
Posted by: Ken Doctor | January 27, 2008 at 06:03 PM