March 14, 2005

The market for free news  

This New York Times article (which contais an ominous hint that the Times may start charging for its content soon!) stands in stark contrast to this Wired piece by Adam L. Penenberg I linked to last week. The Times article recounts with some dismay the difficulties involved in offering news content for free on the internet, and casts a jealous glance at the Wall Street Journal's online strategy:

Perhaps the biggest obstacle for newspapers is that online readers have been conditioned to expect free news. "Most newspapers believe that if they charged for the Web, the number of users would decline to such an extent that their advertising revenues would decline more than they get from charging users," said Gary B. Pruitt, chairman and chief executive of the McClatchy Company, which publishes The Sacramento Bee, The Star Tribune in Minneapolis and other papers, which do not charge for their Web sites.

The Wall Street Journal experiment suggests the contrary. About 700,000 people subscribe to its online edition, with 300,000 of them subscribing to the Web edition only and 400,000 subscribing to both the online and print editions. The print edition has 1.8 million subscribers.

"If you have strong value, people will pay for it," said Todd H. Larsen, president of consumer electronic publishing for Dow Jones, which owns The Journal. "There is nothing so magical about the Internet that everything has to be free."

Penenberg has a different take on the Journal's long term strategy:
Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)


Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

It might not be a surprise, but I'm inclined to agree with Penenberg. For one thing, the Times piece reads a lot like a preemptive justifictaion for a policy change they're about to implement. Obviously I don't know their plans, but if they're going to make a change, it's hard to see where else they're going but a paid subscription model, even if it is a little dissonant with their recent move to acquire

The main problem with the paid subscription model is that it's betting against the growth of the internet as a news source. In light of everything we're seeing these days, isn't it obvious that that's a bad bet? While this approach may pay the bills in the present, it doesn't expand the brand or seize online market share; instead it's a failure of vision that just settles.

barrett  {March 15, 2005}

I would argue that a significant reason the WSJ pulls off its dollars for content strategy is that it is a business publication. The cost of the paper is paid for not by individuals but by their employers or is treated as an expense of the business for owners and self-employed readers.

I'm not sure the NYT would have the same advantages.

paul  {March 15, 2005}

I agree, and to be fair the Times article makes this point. And inasmuch as the Journal's strategy was to focus on their business customers, it probably makes some sense. But 1) I'm not sure all the customers historically have been business folks (we had the WSJ around my house growing up and nobody was in business) and 2) they've basically written off any crossover business now.

There's a third point also -- we haven't really seen the emergence so far (at least not that I'm aware of) of a serious business blogging community, but if that were to happen, the WSJ would be in a difficult position indeed.

barrett  {March 15, 2005}

That's a great point. Business blogging is an interesting idea. With a few exceptions blogging seems to be an amatuer activity in the original sense of the word amatuer - lover of. A few blogs are commercial, but not many.

Would many people who love business be willing to write about it for free?

paul  {March 15, 2005}

Actually I think there are getting to be a few professional bloggers these days, and I'd be surprised if things aren't heading in that direction for a few people.

I was really thinking of people blogging about business -- this doesn't seem to have caught on in the same way as blogs about politics or poetry or food. Or maybe I'm just in the wrong circles?

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