Tuesday, January 15, 2008
WSJ.com free? Should we?
By Marie Griffin
Is there a future for paid-subscription business news Web sites? This familiar question is being raised again as The Wall Street Journal Online, lauded as the most successful paid business media site, may be shifting soon to a completely ad-supported model.
On Dec. 13, the day News Corp. finalized its acquisition of WSJ.com parent Dow Jones & Co., Rupert Murdoch, News Corp. chairman-CEO, told Fox News Channel's Neil Cavuto: "At the moment, we sell [subscriptions to WSJ.com] to about 1 million people at a theoretical $50 a year. . . . Of that $50 million, $15 million [goes into] just getting subscribers and looking after them." By removing the subscription firewall, he said, worldwide viewership would rocket to 20 million, providing "more than enough advertising to make up the difference."
The online paid-subscription model is as uncommon in b-to-b media as it is among general business media, but Media Business reached out to three executives who oversee paid sites for their views on the paid-versus-free debate.
Prescott Shibles, VP of Penton Media's New Media Group, called WSJ.com's likely elimination of paid subscriptions "a completely horrible strategy. It's foolish to throw away subscription money, which is more or less an annuity, in favor of 100% advertising, which has huge up and down swings."
Although most of Penton's sites are advertising-based, the company has a few successful paid-subscription models. Trusts & Estates, for example, charges one subscription fee that covers 12 print issues and online access, with no free online content.
WardsAuto.com offers articles from related print publications for free and a paid subscriber-only section with extensive industry data and advanced vertical search capabilities. Supermarket News subscribers must pay for the print publication. Online, they can opt to view only free content, pay to access premium online content without the print edition or subscribe to a bundle including premium online content and the magazine.
"The hybrid model allows you to take advantage of search engine optimization and drive as much traffic as possible to the site, but you also can hold some content back for premium people," Shibles said. To give up subscription revenue, he said, is "a short-term grab as opposed to a long-term growth strategy. We want to grow our business on all fronts."
ALM publishes more than a dozen law newspapers, including The National Law Journal and regional dailies and weeklies. Print editions and their corresponding Web sites require paid subscriptions.
Alex Kamm, ALM's VP-digital strategy and business development, said, "We definitely believe strongly in subscription-based sites. We can get payment for our subscriptions online for the same reason we can in print, because we provide must-have content for a specific audience."
Although WSJ.com has an opportunity to grow its audience 10-to-20-fold by going free, "we don't have huge CPMs," Kamm said. "We reach small, targeted audiences that are important to advertisers. We want to increase our advertising revenue but not because we're trying to replace subscription revenue."
Like Kamm, Bill Scott, VP-group publisher of Jobson's Retail Optical Group, said that must-have information is crucial to the paid-subscription model.
Retail optical industry news is rarely covered by the general media, so the news provided in twice-weekly VMail Extra e-newsletters is essential. "Because VMail is viewed as need-to-have by our industry, they are willing to pay for it," Scott said.
VMail subscribers, who pay about $80 a year, also get full, unlimited access to visionmonday.com. Although there's no separate subscription for the Web site, nonsubscribers have their access limited to content from the current print issue, the multimedia section and the OptiStock financial section.
So far, price resistance hasn't been an issue, Scott said. "Two years ago we doubled the subscription price and we ended the year with about 10% more subscribers than we started with," he said. Based on that, Scott doesn't expect much change in the subscription base with the 10% price hike he's implementing this year.