Murdoch's New Internet Strategy for the WSJ

Reservoir Hill writes "Once Rupert Murdoch's acquisition of Dow Jones & Company is completed later this year, Murdoch plans to provide free access to The Wall Street Journal's Web site, trading subscription fees for anticipated ad revenue. The WSJ web site, one of the few news sites to successfully introduce a subscription model, currently has around one million subscribers and generates about $50 million annually in user fees. Murdoch's decision to move to an advertising based model comes amid reports that newspaper's online profits margins are skyrocketing worldwide. Murdoch's previous internet initiative, his acquisition of MySpace has worked out very well. He actually first discussed this two years ago when he spoke before the American Society of Newspaper Editors on the role of newspapers in this digital world.""

Idiots. they should have done it long ago

[unity100]

the companies who would like to see their ad in myspace would pale in comparison to the ones that would put their ads on wsj. if they had done it long ago, they would have dwarfed that $50 mil buck a month for long now.

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[Slashidiot]

I guess now that's the only way ahead. It is hard to support your business with only subscription revenues. First it was the NYT and now the WSJ. I think in the long run, the right business model is similar to what slashdot has right now. Offer plenty for free, get ad revenues, offer a premium for a small fee, for hardcore users.

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[captainwisdom]

Say what you will about Murdoch (I like him - I'm a conservative), he's a helluva businessman. Although more needs to be done, he's thankfully changed the face of news in this country.

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[hey!]

Say what you will about Murdoch (I like him - I'm a conservative), he's a helluva businessman. Although more needs to be done, he's thankfully changed the face of news in this country.

You realize that those two statements are not logically related, right? Just because a news organization takes a step in the right (that is to say correct) direction businesswise doesn't mean that is a step in the right direction for news.

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[uniquename72]

I'm a conservative, too. Which is why I loathe the man for helping turn TV news into infotainment.

Even if you agree with the right-ward slant of Fox news (and, being a conservative -- rather than a neocon -- I do not), you gotta admit, there just ain't much news there.

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[slashchuck]

"... that $50 mil buck a month ..."

That's $50 mil bucks a year.

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[TapeCutter]

Probably the mention of the word "union", plus the fact that most mods around here were still in nappies when Murdoch was raiding Fleet street and Thatcher was implementing a centuries old joke by importing Australian coal to Newcastle.

Whatever you think of Murdoch and unions, one has to admit he knows how to make money and can spot a bargain owned by technophobes from the other side of the planet.

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[Mr. Underbridge]

the companies who would like to see their ad in myspace would pale in comparison to the ones that would put their ads on wsj. if they had done it long ago, they would have dwarfed that $50 mil buck a month for long now.

This hasn't always been the case. Recall what happened to online ad rates 5 years ago. A steady subscription model can be quite preferable to wildly fluctuating internet ad rates. Kind of like how a CD making 5% can be better than junk bonds that might make 15%...or lose a ton.

Presumabl

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[Mr. Underbridge]

And if you're big enough, wild fluctuations in the cash flow from one small segment of your business don't matter if the average is high enough over time.

Only if they have heavy cash reserves to absorb the fluctuation, and the segment is small relative to other pursuits. I don't think that was true for the old ownership. Also, they apparently built a rather successful subscription model, one of very few to do so. So it's not like they were hurting from the lessened ad revenue, really.

With the acquisit

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[sseaman]

the companies who would like to see their ad in myspace would pale in comparison to the ones that would put their ads on wsj. if they had done it long ago, they would have dwarfed that $50 mil buck a month for long now.

I'm not sure about this.

AFAIK, everyone with money who reads newspapers for business news already has a WSJ subscription, and the majority of these readers probably prefer to read the print copy. Those who are interested in business news, but who don't have a subscription or are put off by the yearly access fee to on-line content probably aren't the target consumer for the ads that will appear.

I don't know the numbers, it's just a hunch. I think the penetration of WSJ in the households of the wealthy

Is this irony?

[SmallFurryCreature]

That a story about an online newspaper dropping subscriptions is on an online newspaper that requires a subscription?

Oh well, we get a free newspaper but in exchange it means yet more of the media being owned by the same guy.

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[mrbluze]

Oh well, we get a free newspaper but in exchange it means yet more of the media being owned by the same guy.

I agree it's a bit ironic, but seeing this in the context of a broader media war, it might make more sense. Research is showing that people are turning away from newspapers, both printed and on-line, as their source of news. Paid journalism is finding itself in a bit of a decline and the void is being filled by amateur bloggers. They have more freedom to sensationalize and report their own view from the coalface. Who knows if it's more reliable to read the New York Times for your financial news or Jim's S

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[polar red]

yup, no-one can stop free information flow anymore, the old media-conglomerates still try, but are losing the battle, Allthough i think search-engines will have a certain hand in the flow of information, but not more than that.

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[dc29A]

Who knows if it's more reliable to read the New York Times for your financial news or Jim's Stock Blog? Many people I know have found the blogs & forums to be a much more useful and timely source of information about what they need to know.

For stuff like computer hardware, music or video games, I read blogs. They are simply way more insightful and full of interesting information compared to sellout game magazines and other mainstream computer magazines. As for music, there is no coverage of underground music anyways, so I turn to ezines and blogs.

I wouldn't be surprised that this happens to other mainstream media. I mean, I rather read a leftist blog than watch/read CNN who all they do is publish stories about Britney and other Hollywood ret

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[umghhh]

where is the surprise here? The forces of market together with the forces of human stupidity and ignorance are so powerful that nothing can stop them. I wonder what that means to freedom of speech and other such basic rights however - to paraphrase what agent Smith once famously asked: 'what good is freedom of speach if you are unable to speak?
I wonder how well the private blogs will do against such freedom of speech as to be seen coming. Or is it my depression obscuring the rose picture of reality?

Are WSJ readers too dumb to use ad blockers?

[SystemFault]

Is Murdoch counting on the proposition that WSJ readers too dumb to use ad blockers like the Fireox/Adblock Pro combination?

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[QuantumG]

You are aware that the vast majority of normal people who use the Internet actually enjoy the advertisements right?

They click on the monkey.

The Monkey

[handy_vandal]

You are aware that the vast majority of normal people who use the Internet actually enjoy the advertisements right? They click on the monkey.

Is this true? I remain unconvinced.

Shock the monkey, yes. Spank the monkey, absolutely. But click on the monkey? I dunno.

-kgj

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[jo42]

Never underestimate the power of an infinite number of monkeys, or descendants thereof, clicking.

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[piojo]

Is Murdoch counting on the proposition that WSJ readers too dumb to use ad blockers like the Fireox/Adblock Pro combination?

First off, not everyone that allows ads is dumb. I allow slashdot's ads so they get a few cents from me, now and then (correct me if I'm wrong--if it's pay per click, I might as well turn the ads back off).

But I agree with you. Maybe it's possible to make ad revenue right now, but it might become increasingly difficult, as more people adopt ad blocking technologies. If the ultimate goal is free news, ad blocking is harmful.

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[SystemFault]

First, let me apologize for my sloppy typing and perhaps for an over-generalization.

I have no objection to a *moderate* amount of advertising. I also have no objection to the Loch Ness monster, Santa Claus, and the Tooth Fairy.

Let's face it: most advertisement supported sites attempt to shove a hundred times as many bits of bandwidth consuming advertisements as compared to actual news text. That, along with pop up/pop under windows, cookie madness, and tracking -- well, is it really any surprise when cons

Sorry they've marked you down

[paladinwannabe2]

There is a certain amount of truth in what you say- probably why you got modded down so quickly. I also prefer letting (most) ads run- I figure if I'm getting benefit from a site, they might as well make money off me (or try, anyway- just because I see ads doesn't mean I'll click on them.) Pop-up ads, of course, are not acceptable, and those will be blocked.

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[Nazlfrag]

Indeed, I allow ads onto sites that I frequent, though I block ads by default and have the larger advertisers (doubleclick, google etc.) blocked in my host file. Still, I never think I'm stealing bandwidth by not looking at ads, that is completely disingenuous. I have to pay for bandwidth on my end, if they don't want to pay for bandwidth on theirs they can get off the net.

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[aussie_a]

Why don't you just steal bread and other stuff as well then?

Not dumb, don't care. Don't confuse the two.

[Shivetya]

It isn't that people who don't use ad-blocking software are dumb, it is more likely they don't care. Especially if the ads are non obtrusive.

I only block ads that open new windows and those which sound/video. Other than that I will let the ad display; after all it already consumed my bandwidth - ad blocking plug ins don't stop it from getting to my pc, just displaying it. I figure its not a big price to pay to view content for free.

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[slapout]

Perhaps he's planning on acquiring an Ad block company and making money that way :-)

50milj and nytimes URLs

[siyavash]

$50milj is nothing for him. He rather open it up to masses so he can "reach out" with "right" information to them. ;)

Also, I know it's offtopic but can /. please stop using URLs directed to nytimes? They all seem to need to login.

New revenue model

[TheSlashaway]

Murdoch's plan is to make the newspaper free because his new revenue model is to shape public opinion with articles to buy his investments.

Depends on how he plays...

[cthulu_mt]

If Murdoch doesn't play around with the newsroom the WSJ should continue its tradition of excellence. I've been reading the NY Times since it went free online and have been anticipating the same for the WSJ.

The only case

[jbolden]

I think this is worth discussing. For about 10 years the WSJ was the perfect example of a site that could get paid subscribers in large numbers, unlike any other newspaper in the USA. It had a large body of specialized content not available elsewhere (and no the wonderful data tables in the WSJ are not available in blogs) and a dedicated readership. So we aren't talking a site that has gone from subscriber to ad-revenue but rather the example site. Moreover the WSJ unlike most other newspapers hasn't

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[nomadic]

A vitriolic, nationalistic, jingoistic, oversimplified propaganda sheet.

The hilarious thing is he's nationalistic and jingoistic about more than one country. Didn't think that was possible.

There are profit margins for print media?

[krygny]

Hmm ... Why would online ad revenue profit margins skyrocket?

Two interrelated reasons:
1) There are only fixed costs associated with online delivery, and they are very low. After you reach your first reader, whether you reach your 2nd reader or your 2nd billion readers, your costs never change. The fixed costs of print (presses, pressmen, plants, etc.) are much greater than online production.
2) On line production has no recurring costs. The recurring costs for print (newsprint, ink, delivery, transportation,

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[j-pimp]

1) There are only fixed costs associated with online delivery, and they are very low. After you reach your first reader, whether you reach your 2nd reader or your 2nd billion readers, your costs never change. The fixed costs of print (presses, pressmen, plants, etc.) are much greater than online production.

You need more than a cable modem to deliver to the Wall Street Journal, and as you reach more people you eventually need more servers which cost more electricity, and unles you host your own data center, cost you more a month. Its not quite at the point where each hit adds money to your costs, but there are relative costs per hit.

Works for me

[dlc3007]

I would much prefer an ad-based strategy rather than subscription. Adblock works great!

Why the old media still trumps the new one...

[dada21]

As a semi-pro blogger who does receive compensation (from advertising, paid product placement, and subscriptions), I still believe there is a long way to go to compete with the biggest old media outlets, especially newspapers. The key difference that I've seen, so far, is that the newspapers still have reporters, while the new media has just journalists. There is a decline in old media reporting, though, as more and more newspapers just regurgitate whatever the AP is reporting. Google News is hilarious when you find 500 identically written articles by major media outlets.

The WSJ has a unique combination of reporters, journalists, and oped pieces. They're going to be hard to topple. Their biggest downside is their support for war and their support for more government. So far, though, it has not hampered their growth.

I am one of the few new media writers that still has faith in the old media, but not most of it. There's room for a few dozen major newspapers to compete, but the majority of them will find themselves without readers, or advertisers, as they continue to lose market share to the new media writers who are faster, more varied in opinion, and closer to home for their readers.

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[hey!]

Well, that's the thing about the WSJ: a tradition of top notch shoe leather reporting with utterly untainted right wing editorials. It's different people doing each function, and each function serves a different purpose. The editorial position is the sizzle that sells the proverbial steak, and the journalism is the steak that gives the sales pitch its credibility.

The big question everybody's asking is whether Murdoch is coming in with an LBO kind of mentality, looking at the WSJ as collection of unrelated

Murdoch's Previous Initiatives Not All Success...

[kalidasa]

Murdoch's previous internet initiative, his acquisition of MySpace has worked out very well.

His previous project, sure. But his first Internet initiative, the Delphi online service (a "competitor" to AOL), wasn't so successful. Indeed, it was so unsuccessful that it's hard to find any trace of it on the Internet.

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[VJ42]

Well, if you're in the UK there's always Private Eye [private-eye.co.uk]...
For those of you who aren't British: http://en.wikipedia.org/wiki/Private_Eye [wikipedia.org]

It's the only printed news organ that I buy; Indeed at ~£25 a year I have a subscription.

OpinionJournal considered harmful

[senahj]

The straight-news part of the WSJ has some of the best and most eclectic reportage out there. It will be wonderful to be able to read it online for free (as in beer).

The OpinionJournal is so factually-challenged and idealogically blinkered that, at free, it costs too much.

But, when will ...

[Skapare]

... the New York Times drop their stupid login requirement?

Don't do it! It's a mistake!

[r_jensen11]

Putting more ads on the wsj's website would be a major mistake if it's anything like what the BBC is trying to do. Odds are they're going to piss off their main customer base due to annoying and obtrusive flash ads that distract the readers from what they're trying to read. And since this is the WSJ, these readers typically think that their time is scarce and don't want to have to be annoyed with said distracting ads.

I'd rather pay $100 a year

[nbauman]

I've been reading the WSJ since 1972. When they went on line I bought a subscription.

Over the years, the news section of the WSJ has been the most reliable source of general news that I've been able to find (and I also read the NYT every day). They've resisted influence by advertisers, government intimidation, and the bullshit that other news sources fall for. I'm in a good position to judge health care, which is my specialty. Here's an example of the kind of coverage which you literally won't find anywhere

Bill, Hillary, and Rupert

[fm6]

I'm still trying to figure out how the dude can be Bill O'Reilly's boss and still be good friends with Hillary Clinton.

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[Bluesman]

You're probably operating under the mistaken assumption that anything those people say is what they actually think, and not just what plays well to an audience.

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[fm6]

I think you're confusing cynicism with doublethink. Someone like O'Reilly may be motivated by the desire to satisfy his followers' prejudices, but that doesn't mean he doesn't believe most of his own BS. I've met too many people with the same psychology to believe that it's all a show.

I just can't see it

[pugugly]

Sorry, conservative or not, getting your business info from a Murdoch owned company seems to me to be a good way to go broke.

Put it this way, how much is your decision to buy into the stock called "Iraq War" influenced by whether you listen to NPR or Fox? Going by this reputation for fair and balanced, do you want to risk your money in the belief that Rupert Murdoch wouldn't deceive you when he can make actually make money doing so?

I'll wait a few years and see what happens to news coverage from the journal