While other newspapers like the New York Times grapple with how to charge readers for content online, the Wall Street Journal stands out as one of the few newspapers that doesn't have to deal with such issues.

Unlike many other newspapers, the Journal didn't drink the 'content just wants to be free' kool-aid. When it seemed like advertisers had an unlimited amount of money to throw around, the Journal stuck to its guns and ironically, has managed to have its cake and eat it too. Its ad sales are healthy and the mixed model it employs has apparently proven to be the secret sauce.

And now the Journal is looking to build off of its paid content success with a Professional Edition set to launch this November. It will include access to the Journal, Dow Jones Newswires, Dow Jones' Factiva news archive, 17,000 public and non-public global sources, 30 industry pages, and six special industry sections that are managed by Journal editors.

According to Reuters, the Professional Edition of the Journal will essentially be sold like software:

Dow Jones plans to sell the edition to businesses, which would make it available to employees through “site licenses” (ie, your business buys a license that makes the professional edition available to X number of people for a price to be determined).

In January 2010, members of the public will be able to purchase individual access to $49/month.

If this all sounds a bit like a 'lite' version of a Bloomberg Terminal, that's because it basically is. According to Clare Hart, who manages the Dow Jones Enterprise Media Group, the Professional Edition is targeting the market between average Journal readers and those who subscribe to services that offer access to professional, specialist data feeds -- the Bloomberg Terminals of the world. "Customers want the simplicity of a consumer application with the sophistication of an enterprise application," she stated.

It's an interesting concept. While I don't think it's entirely clear what the size of the market the Journal is targeting will be in practice, if there's a good market there the Journal is a logical choice to tap it successfully given its strong brand. It recently became the top newspaper in the US with daily print circulation of 2.02m copies and has in the past had more than 1m paying subscribers online. For readers who want more of the Journal's content, access to archives, and a treasure trove of data sources, $49/month seems like a small price to pay so I hardly doubt that the Professional Edition will 'fail', even if it doesn't take over the world.

The key observation to make here is that the Journal is building a new product that is designed to provide subscribers with more value. And it targets a specific type of consumer that the Journal believes has a want and need for its new offering. The Journal is not trying to figure out how it can change its business model or how it can charge for something that it has been giving away for free. That makes all the difference in the world.

Photo credit: Stephen Cummings via Flickr.

Patricio Robles

Published 22 October, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)



"Unlike many other newspapers, the Journal didn't drink the 'content just wants to be free' kool-aid. "

So it's the position of this blog that free content is a strategy to be mocked, rather than analyzed? If it's "kool-aid", why are you doing it here on this site? Or do you also use free content to drive other revenue? 

The WSJ offers paid content through its website. Your aside about its "mixed model" obscures the fact that they do in fact offer free content--quite a lot of it--through Google News and through their own site. 

The WSJ also isn't a "newspaper" in the sense that the New York Times is. It has a much smaller audience and purview than a general paper, and as such has far different marketing requirements. 

over 8 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy


'Content just wants to be free' isn't a strategy.

Of course there's a place for free content. Econsultancy offers plenty of great content at no cost, as you know, while other content that has significant value requires a paid subscription. A mixed model works very well for many businesses when thought is put into the composition of the mix.

And therein lies the rub: many newspapers didn't give much thought to anything when they went 'free'. Let's address the subject of newspapers and their content strategies by comparing the WSJ to the NYT.

The NYT ditched its subscription service because it bought into the asinine notion that it could simply make its content free and turn all its wonderful traffic into advertising dollars. In the process, it has devalued its content and contributed to its commoditization. Now that it recognizes the folly of giving away a million keys to the castle, it wants to restrict access by charging. But that's hard to do when you've sent a very clear message that your content isn't worth more than a few banner ads per page.

The WSJ, on the other hand, has retained the perception of value in its content because it was strategic in deciding what to give away and what to keep behind the paywall. Ironically, its paywall has helped it maintain the value of its ad inventory. After all, it's simple economics: capped available inventory coupled with decent demand = more stable CPMs.

Taking a step back, there are a number of problems with giving all of your content away for free in exchange for 'attention' that's being monetized solely by advertising:

1. Advertising dollars aren't unlimited. Media buyers, on the other hand, do have what seems to be an unlimited number of choices. So they're in the cat bird seat.

2. Increasing pageviews by giving content away for free doesn't necessarily result in a correlated increase in ad revenue because most publishers do a very poor job of managing their inventory. In other words, impressions increase but CPMs drop because nobody's looking out for yield. It's kind of interesting: just as these publishers have commoditized their content, they've commoditized their ad inventory.

3. The glut of ad inventory on the web as a whole has put significant downward pressure on CPMs across the board, as have retargeting and behavioral targeting technologies, which can give advertisers a cheap way to reach the 'same' audience as a premium property at lower cost.

4. Ad networks and exchanges often give savvy advertisers the ability to purchase inventory on top-tier sites for a small fraction of the CPMs they'd have to pay when buying direct. So in many cases in-house ad sales have been cannibalized.

5. CPMs and CPCs are not fixed. Basing your entire online revenue stream on advertising is like speculating in the stock market. There's a good reason why it's not advisable for the average person to have 100% of his retirement money in the stock market. Fixed income instruments are often a good part of a person's portfolio and although there's no guarantee that you'll always get a return with a subscription business model, an established subscription business kind of resembles a fixed annuity when churn is low.

Bottom line: call it whatever you want, but whatever convinced newspaper chiefs that they should give away their most valuable asset (high-quality content) and hope that the digital economy equivalent of the stock market (the 100% advertising business model) would go up forever.

over 8 years ago

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