Can WSJ pay model work at other sites?
Proponents and opponents of paid content often invoke the subscription model at the Wall Street Journal Online as the reason for why their point of view is right.
In the following guest commentary, Bill Grueskin, former managing editor of WSJ.Com, sorts through what he calls “a few common myths” to provide insights into why and how the Journal came to be the most prominent pay site on the web. He left the Journal last summer to become the dean of academic affairs at Columbia University’s Graduate School of Journalism.
By Bill Grueskin
Dow Jones has been strikingly consistent (some would say maddeningly stubborn) about its paid strategy.
While I was at WSJ.Com, we had many spirited discussions/arguments how much to raise the price, how many articles to make free, how to generate more outside traffic. But no one ever seriously considered making the site free.
Rupert Murdoch mused openly about lifting the subscription wall during his negotiations over Dow Jones, but changed his mind once he took over and realized how valuable the strategy was – and how irrevocable a change in that strategy would be.
And so, how replicable is the Journal’s model?
It’s hard to say, given how rarely others have tried to charge for content, and how half-hearted those efforts have been.
The Los Angeles Times, for example, tried charging for its Calendar section and listings a few years ago. It survived about as long as the New York Times TimesSelect experiment, which involved charging for opinion columns and several other online features.
One lesson from those efforts: It is a mistake to ask people to pay for chunks of content that previously were free, especially when the content – particularly something like opinion or entertainment content – is replicable elsewhere.
Which gets to the larger point, and to the Journal’s unbending decision to charge – and keep raising the price – for WSJ.Com. It is very hard to ask people to pay for something you’ve trained them to get for free.
This gets back to Alan Mutter’s concept of “Original Sin.” In that scenario, what argument would you make to your readers? Do you tell them that your current business model is failing so they need to support this other version of the same product? At that point, media companies become charities, not businesses. And charity isn’t going to support journalism.
The arguments also ignore the fact that most media companies have thrived on advertising, not circulation revenue. Even in flusher times, what readers paid for the newspaper generally covered the newsprint, ink and delivery. It was all those ads that kept the enterprise going. And, of course, that’s even more true in broadcast television news, where the subscription cost is zero.
One of the lesser-known benefits of WSJ’s subscription model was that it enabled the site to charge considerably higher rates for ads than free sites did. Advertisers were paying for the Journal’s audience, which, beyond being affluent, was in a position to buy Cisco servers and JP Morgan financial products. Ubiquity is great, but it doesn’t pay the bills by itself.
And this is where I think the paid vs. free argument gets lost.
Free-content advocate Jeff Jarvis, Alan and I would all likely agree that slapping a subscription fee on an existing free news site is going nowhere. Attaching micropayments, iTunes-style, is even more hopeless. Such tactics may temporarily reduce cannibalization of the print edition, but that erosion is well under way.
What’s missing is the more important quality: engagement. Readers’ time can be as valuable as their money – more so online, where options to flee to another news source involve clicking a mouse, not heading to the newsstand to buy a different newspaper.
You see this error in the way online publishers gauge their traffic. They usually cite monthly unique users, but, in fact, I’ve always thought total time spent per user, or page views per visitor, were more meaningful metrics.
If a news site gets 250,000 new unique users thanks to a link on Drudge, and that generates exactly 250,000 page views, the value of that traffic is minimal. All it shows is that those readers are engaged with Drudge, not the news site.
Engagement is important journalistically, too. Ask many reporters why they got into the business, and they say they wanted to have impact – on people’s lives, on government conduct, on foreign policy. You get impact by engaging readers, and, in a happy coincidence, you also get a better economic model.
What are the kinds of things readers that readers of a local news site would pay for?
How about a daily email that told them what traffic spots to avoid, or an authoritative reader-generated guide to the best and worst public schoolteachers? Or a regularly updated site that told readers how much and why local real estate listings had dropped or risen in the last few weeks, along with examples of how certain homeowners got appraisals lowered? Or innovative coverage of local government, providing sample bills every time property taxes go up and video clips of commission meetings intertwined with analysis and context? In other words, content that is truly of online, not just posted there. (Alan made much the same point, with his own examples, in his recent post here.)
Charging readers for content might work, but it needs to be a consistent approach, with targeted content that enriches the lives of readers. More fundamentally, online editors and publishers need to value their readers’ time, and make editorial and business decisions that fit that goal.
The Journal’s route may be unique, but the key to expecting readers to pay you – with their money or their time – is not.