One of the longest-running debates in the online “content” -osphere is whether or not the subscription model of the Wall Street Journal Online (WSJ.com) is the right strategy. Sure, they have shown that people actually will pay to subscribe online, but what is not known are the costs associated with acquiring those subscribers. More importantly, “outsiders” don’t have the knowledge necessary to calculate the lost-opportunity in stiffling the advertising potential of tens of millions of “pages” of business information that are contained on the site.
Jeff Jarvis makes the argument — one that seems so counter-intuitive to old-time media executives — for the “free model.” I agree with his philosophical and marketing-oriented reasoning, but I think there are more practical, bean-counting reasons for the WSJ.com to drop the cost-wall on a big portion (but perhaps not all) of WSJ.com
There will always be a small, but willing market of buyers for high-priced access to business-critical, specialized, timely data. However, WSJ.com straddles that delicate space between trade-journal and mass media. There is a small percentage of its content that could be sold for a much higher price to some small percentage of its readers. Bloomberg became a billionaire proving that.
However, WSJ.com can’t dominate the financial news and information web from behind a firewall. And as much as those running MarketWatch may hope one day it will be such, that “free” sister of WSJ.com will never have the clout and brand dominance of the Wall Street Journal.
Rupert Murdoch, who has been coy in suggesting WSJ.com may drop the subscription model, had the ability to unleash his army of analysts during a due-diligence period of dissecting the data necessary to determine the economics of free vs. paid. They already know (as Jeff speculates) whether or not the WSJ.com would be more profitable if it were free.
Without question, the Wall Street Journal has the greatest collection of business and financial reporters and analysts assembled in one organization. It has some of the best writers — financial or otherwise — working today. If it were free, not only would it become the dominant financial news and information source online, it could also compete with any brand as the leading source of all news.
The Wall Street Journal has long recognized this. (Jeff suggests — and I have no way of knowing — that it was some among the Bancrofts who couldn’t bring themselves to give it away.) I do know that a couple of years ago, I blogged a session at a conference in which WSJ’s now-publisher (then president of the digital division) Gordon Crovitz said this about the “cost” of being behind a subscription-wall: “We have a full-time editor at the Online Journal whose job it is every day to select stories to throw over our firewall to make available to bloggers and to other websites for free. And we do that in order to distribute our content, keep our brands active and dynamic, and to give bloggers and search engines access to some journal content. We’re obviously very careful about doing this, we don’t want to undermine our subscription model. When you publish a million fresh pages every day (my emphasis), you can afford to make a dozen or so articles free on the Internet.”
That was in response to the recognition that being behind a cost-wall chokes WSJ.com content from being a part of the way news is more-and-more disseminated online: via news aggregators like Google News. But also in that response was a metric that is rather astounding — and, frankly, hard to fathom.
One-million fresh pages of business news, information and data a day.
Okay. How many of those pages are visited by the current subscribers of the Wall Street Journal? How much of that rich and long tail of advertising inventory could be “monetized” if the Journal opened them up to the huddled-masses yearning to surf free? Those are answers that News Corp. number crunchers have already modeled. Those number crunchers — and, perhaps, Jeff’s more lofty reasons — will determine the next step the new owners of WSJ.com take.
I predict we’ll see the doors flinging open on a major portion of the content soon. However, on certain sub-sets of highly-technical, business-critical data on the site, the cost of access will increase. In the end, the new owners will make lots more money.
Bonus link: Staci Kramer of PaidContent.org interviewed Crovitz a few days ago and he suggested the “mixed” model of free and subscribed content will continue. Obviously, he’s the man (or, he is as long as Rupert Murdoch says he’s the man). I just think the “mix” will suddenly flex out on the free part of the mix.