November 18th, 2007
The New York Times announced recently that it would shift away from its partially subscriber-based model to solely an ad-based model. Here is one of the most valuable media properties in publishing changing its tune, and perhaps signaling a new tune for all newpapers. As reported in InformationToday, “All the News That’s Fit to Print” became “All the News That’s Fit to Give Away.”
The number of subscribers was growing steadily. The total readership was 787,400, of which 227,000 were $50/year paying subscribers with the rest a combination of college students with free access (89,200) and home delivery subscribers to the print edition who chose to add TimesSelect at no extra charge (471,200). The service earned $10 million annually in subscription fees.
Then on November 13th, although Rupert Murdoch has yet to take formal ownership of Dow Jones and The Wall Street Journal, he told reporters: “We are studying it and we expect to make that free, and instead of having one million, having at least 10 million-15 million in every corner of the earth.” The New York Times reported that “the Web site, one of the few news sites globally to successfully introduce a subscription model, currently has around one million subscribers, which generates about $50 million in user fees.” (Apparently an understated number, as the minimum price for an online-only subscription is $79/year, with renewals at $99/year.)
Reactions to both announcements have been mixed. There’s an emerging group of hardcore believers determibed that the future of the Internet lies solely in the success of advertising programs.
Others, like commentator Barry Ritholtz make some compelling points: “Thumb through either the print or online Journal, and you will see many high end, luxe advertisers. They are not attracted by the sheer volume of readers, but rather by the very appealing reader demographics: They pay a huge premium in ad rates to reach the highly educated, high income, tech savvy, free spending readers of the WSJ.”
Meanwhile on November 1, Tom Curley, president and CEO of The Associated Press, in a speech to the annual Knight-Bagehot Dinner, offered several trenchant observations. “The portals are running off with our best stuff, and we’re afraid or unable to make or enforce deals that drive fair value,” he remarked. And later: “We must change how we charge for content. In the financial marketplace, hot news is the most valuable of all. Hedge funds pay premiums, add spiders and link to trading programs. One-size-fits-all on the business side has to evolve…”
As Mr. Ritholtz concluded, “Mr. Murdoch has shown over the years that he is a crafty businessman with a good feel for what the reading/viewing public wants. We’ll find out soon enough what the fate of the firewalled WSJ.com will be…”
Exactly.