A Bear Stearns report examines at the economics of the Wall Street Journal knocking down its paid-subscription wall:
WSJ.com revenue is currently pegged at $78 million annually, based on an estimated 989,000 subscribers paying $79/year. Including non-subscriber traffic, the company claims 122.4 million monthly page views. Based on an estimated CPM of $6 and a few other assumptions about sell-through rate and ad impressions per page, Wang arrives at the 12x conclusion.
Still, as Joseph Weisenthal notes, “$78 million in revenue only accounts for an estimated 4 percent of Dow Jones revenue, so from a strictly financial stance, it doesn’t much matter either way to News Corp.,” the Journal‘s new owner.
Where I work, we’re very wary of static economic analyses: why should a huge change (e.g., raising tax rates) have no impact on behavior (e.g., hours worked)? Yes, certainly, lowering the cost of getting Journal content to $0 will undoubtedly bring a surge in readership–maybe 12X, maybe more, maybe less. That’s not the interesting question.
The big question for media watchers should be, how will the Journal react?
A subscription to the paper today costs $100 per year (maybe; it’s hard to tell), and if the paper’s Weekend section is any indication, it’s subscriber base consists of Robb Report readers who also care about what’s up in commodities markets–that is, the gainfully employed among Robb Report readers.
The result is a general-interest newspaper with a niche sensibility. The stipple portraits and oddball Marketplace-section articles have a continuing charm. Articles on matters of finance assume a remarkable expertise of readers. Foreign coverage is delightfully eccentric, mustering on a daily basis the sort of empathic setpieces that the Christian Science Monitor has become known for in recent years. (That paper’s output, however, has become more erratic.) In today’s Personal Journal, “A Burden of Wealth: Family-Office Hunting” for those who “need help in managing their fortunes” sits just above “Higher Food Prices Start to Pinch Consumers.”
Will these charms bow to the pressures of a wider market? Witness that over at NYTimes.com (the online presence of what was once the Tiffany broadsheet), today’s top stories concern scheduling consultants for adolescent boys, the “invisible ingredient in every kitchen” (heat), and the psychology of decluttering. At the Journal, the top stories of the day discuss retirement savings, oil prices’ effect on international relations, and the Fed. Though often whimsical, it’s also a more serious paper when that is demanded.
One possibility is that the Journal will become a caricature of itself, narrowly focused on finance and snooty lifestyle to simplify its attraction. No doubt, this could further synergy with News Corp.’s other properties.
Another is that the Journal goes the way of the NY Times, loading up with self-help pieces and other bits of service journalism tailored to its demographics. Spreading beyond its New York roots has trivialized the contents of the Times , which is increasingly an upscale USA Today. Why not the Journal, too?
In any case, it’s hard to imagine that boosting circulation by a factor of 12 (or even far less) won’t have a major impact on what the paper prints.
As a subscriber to the print edition, I’m happy with the status quo–the website is convenient but with walls just high enough to keep the hoi polloi out.
This flattening of markets wasn’t quite the Internet’s promise a decade or more ago, when we all talked about niches and narrowcasting. That’s done well, certainly, but today the New York Times competes for the same readers with CNN, the BBC, Yahoo!, TMZ, and Matt Drudge. Is there still room on the Internet for something like Hotwired, halfway between niche and general interest? It seems a dying, if not already extinct, category.