Why Does WSJ.com Charge For Content?

Why do you need to pay money to read WSJ.com? The former managing editor of the site, Bill Grueskin, has a telling anecdote:

One day last month, a Columbia Journalism student asked me in class why WSJ.Com had started as a paid site. This moment reminded me of the scene in Annie Hall (about two minutes into this), where Woody Allen produces Marshall McLuhan to refute (OK, I get the irony) a pompous Columbia instructor pontificating about the media.
At the class, I turned to my co-instructor, Peter Kann, former CEO of Dow Jones and the person ultimately responsible for the paid strategy.
"I made the site paid because I was ignorant, " Kann told the class. "I didn't know any better. I just thought people should pay for content."

This is a debate which won't die. But it's certainly the case that publishers in general have for years been fighting a rearguard action against the open-access remix culture that thrives online. Because some people will pay, and because other people are willing to pay, they conclude that all their readers must pay. And even when you don't pay in cash, you must certainly pay in attention: if you want to read the publisher's content, you must navigate to his website, and read it in exactly the way he wants you to read it, even if that means clicking through umpteen different pages, or sitting through flash ads, or otherwise being distracted and annoyed.

Now on the one hand it's obvious why publishers behave like this online: they want to make as much money as possible, and the two biggest sources of online revenue are advertising dollars and subscription fees.

But on the other hand, this whole way of looking at the world is actually a major departure from how publishers have historically behaved. They've made their newspapers and magazines as easy to read as possible; they've charged as little money for them as they can, often distributing them at a loss, in order to maximize readership; and in general they've bent over backwards to create a consumer-facing product which pleases, rather than annoys, the reader.

Elizabeth Jensen has an interesting article today about a different and quite promising new and alternative business model: one which plays to the strengths of the online world rather than fighting against its weaknesses (like the fact that it's not well suited to display ads). GlobalPost.com makes substantially all of its content free, but then charges for a product which takes advantage of some very high-touch interactivity:

Called Passport, it offers access to GlobalPost correspondents, including exclusive reports on business topics of less interest to general audiences, conference calls and meetings with reporters, and breaking news e-mail messages from those journalists.
Passport subscribers, who pay as much as $199 a year, can suggest article ideas. "If you are a member, you have a voice at the editorial meeting," although the site will decide which stories to pursue, said Charles Sennott, a GlobalPost founder and its executive editor. He said Passport is meant to "create a feeling of community" for subscribers who might otherwise see newsrooms as "impenetrable and fortresslike."
GlobalPost correspondents, who include the former Washington Post writer Caryle Murphy in Saudi Arabia and a Time magazine correspondent turned novelist, Matt Beynon Rees, in Jerusalem, are paid extra for Passport work.

In order to maximize Passport revenues, both GlobalPost and its writers are going to want GlobalPost's stories to reach as many people as possible: the website is no longer just a vehicle for selling advertising, but also a marketing vehicle for the broad dissemination of the content, which in turn bolsters the reputation of the journalists in the field.

So if I were GlobalPost, I'd publish lots of full RSS feeds for the entire website, and positively encourage any other websites to republish as much of the content as they like, with the restriction that credit must be prominently given to GlobalPost, along with links to both the GlobalPost home page and the original article. After all, the art of marketing is to go out and reach readers, not to sit back and wait for the readers to come to you. Essentially the articles become a free advertisement for the website, driving traffic there -- at which point it can become monetized, and readers who like the website will stay, and possibly subscribe to Passport. You can't ask more than that.

Setting your information free in this way violates much of the early history of internet publishing -- but it's very much of a piece with the history of publishing more generally. And I think it's a much more hopeful business model than trying to jealously guard your content as much as possible. After all, on the internet, publishers don't really compete with copies of their own content: they compete with all the other content online for readers' attention. Trying to clamp down on copies is very often very silly: it only serves to reduce and annoy your readership. So maybe the solution is to encourage copies, instead.

Comments

[Daniel Herkes:]

The Journal is still worth paying for. The comment sections that many of the articles generate are almost hysterically funny at times, and those writing the comments are directing the content - perhpas inadvertently. Obviously the staff writers know how to provoke their readers into scribbling those god-awful faux pas that pepper the comment section.

An example. A recent article on the closure of emergency room services provoked several of the readers to suggest that sick poor people would do better to just die, rather than clog the health care system. Marley's ghost was watching that thread!

Mar 24 04:26 AM

[Michael Eis...:]

This IS part of the future. Paying for expertise rather than content!

Mar 24 05:17 AM

[Bean Counter:]

WSJ.com was started in 1996, made possible in its current form by the development of Web Browsers. But for the 10 or 15 years prior to that, Dow Jones was selling WSJ content over telephone lines to customers with modems for a fee. I think the last fee was $25 per month for unlimited usage, but prior to that they charged by KB or by time, as did Compuserve, Prodigy and the early AOL. When WSJ.com was started, it was in some sense an upgrade to the News Retrieval product, and why stop charging for something when people already had proved they would pay. I think DJ's early ventures into electronic pubishing provided knowledge and research that led to the paid model, and a successful one, for its content. Kann's modesty aside, the decision to pay at DJ was an outgrowth of what had gone on before there, and not just a flip of the coin accident.

Mar 24 08:58 AM

[hankscott:]

Why does Dow Jones charge for access to WSJ.com? Because it can! Who wouldn't?

If you can offer distinctive content that people want / need (and by distinctive, I mean content that isn't readily available elsewhere) why not charge for it? The alternative is to spend lots of time and energy chasing fickle advertisers, or to give the content away and reduce its quality because you can't afford to generate it.

Mar 24 10:11 AM

[baji kimran:]

I don't understand what the problem here is. I start from the premise that most people, like me, absolutely detest unwanted advertising. DVRs initial selling point was one could eliminate unwanted advertising. (I believe the advertising world is still adjusting to the fact that the "spray and pray" is not the most efficient way to reach costumers and in many times counterproductive.)

I pay for the WSJ online. I believe good information and analysis, whether it is in the news business, or just business in general, can command people paying for it. I think advertising on WSJ online is minimal, if it significantly increased and became intrusive, I would not be willing to pay so much or perhaps even cancel.

I would pay for an online subscription to the NYTimes, I really don't understand why it is still free.

For that matter, I would even pay a small fee for access to articles by Felix Solomon.

Mar 24 11:15 AM