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Would You Pay to Read This Story?
Myth: The Journal example is irrelevant because most of its subscribers can write off their subscriptions as a business expense. Back in Kilgore’s day, it is true that most Journal readers had their companies pay for their Journal subscriptions. But that hasn’t been the case in more than 20 years, since the decimation in the ranks of corporate middle managers, and the widespread demise of “expense accounts.” The vast majority of Journal subscribers now pay for their own subscriptions, in print and online.
Myth: The amount of circulation income that can be garnered online won’t be material. It’s been more than four years since I saw the actual numbers, but all indications (and the most informed outside estimates) are that between $80 million and $100 million is now paid each year by readers for access to the Journal’s online edition. That’s more than the annual news budget of all but perhaps two or three newspapers in America. Moreover—and even more to the point today—circulation income continues to be all publishers’ best cushion against recession. That was clear in 1995, and it’s still clear today. Even before advertising began its secular decline (it actually reached all-time highs in 2000), we always knew that advertising is, and would always remain, a cyclical business.
The advantage of robust circulation revenue is why newspapers were long considered a better, higher-margin business than magazines. Most magazines had chased higher circulation numbers at the cost of lower subscription prices, figuring that advertising would more than make up the difference. The result was that each recession would kill hundreds of magazines, but very few newspapers. Thus Life magazine’s original weekly incarnation disintegrated as a business in the late 1960s, just as circulation volume reached an all-time high. More recently, magazines that had sufficiently distinctive content to swim against the tide by charging fuller prices for circulation, such as the Economist, were long recognized as stronger, more stable, more profitable businesses.
Charging for online content may not be enough to save the newspaper industry, and it almost certainly won’t be enough to save every newspaper now in danger. But the time to reconsider newspapers’ online business model is long overdue. As that reconsideration gathers momentum, it’s critical that decisions be made on the basis of facts. In this dark economic moment, the truth is hard enough.
Richard J. Tofel was formerly assistant publisher of the Wall Street Journal. He is the author of Restless Genius: Barney Kilgore, the Wall Street Journal and the Invention of Modern Journalism, and now serves as general manager of ProPublica.
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Richard J. Tofel, general manager of ProPublica, is the author of Restless Genius: Barney Kilgore, The Wall Street Journal, and the Invention of Modern Journalism.
This article makes some good points--leaving aside the author's obvious bias as a former employee of the WSJ.
However, one important caveat to his statement about the volume of paid suscriptions to the Journal: many or most of such subscriptions are sold together with print subscriptions. Mine was--I pay $99 for a year of delivered print copies and web access. That makes it very hard to say how much the web alone adds the Journal's coffers.
For $103.00 no thanks. There is plenty of news on the internet can barely keep up with it all. The only paper I would pay for would be a favorite, and that would be just to keep it from going under. Otherwise think of another way to save the newspaper business.
And PS that favorite would not be the WSJ
Obviously Rick, it is about how much free access was taking away from sales.
You are so quick to tear people down, that is part of the problem too. People are sick are reading stuff that divides but doesn't inform. The only people that value that stuff, do it themselves. For example Rick.
The real issue, is how this negative media, can change people, and maybe people don't want to raise little Ricks, and think less negative media at the doors step is best. I do.
I never listen to that Rush guy, all he does is make you feel angry, and the only ones I know listen to him are other rednecks that think feeling angry is fine, they are the ones who suffer from all kinds of tension issues.
Well this is a concept, let advertising pay for the media. Well duh!!
The assumption is, the internet is taking away from print, that might be partly true, but print news, gets out of date, is really negative, and the internet has more real time news, so you can't compare the two.
Advertising is what pays, or expected to bring in revenues on most of the sites that make money.
Newspapers have destroyed a lot of lives, they print things, as if guilty before innocent, they have lots of misinformation, no wonder people like think tearing people down is ok,just for the sake of it is ok. He would miss the two minutes of hate, I wouldn't.
The same with banks, they would take your last penny, and do that to people all the time, why should we bail them out. Let them die, they would let us die.
Financial post hosts great contests on the net, they have great prizes, and those companies are getting media exposure.
They must be making money, because they are giving away cash prizes in some of their contests.
The wall street journal is not competitive.
The Journal may be enjoying short-lived pay-per-view online success precisely because of the economic crisis. Good luck with that model when a robust economy returns. As soon as any entity charges for information on the Internet, an entrepreneur will find a new way to provide it at a lower cost. The sheer volume of information on the Internet devalues it. Talk about a socialist threat!
This is a tough nut to crack. I understand why these companies are charging but i am pretty sure they will fail. There is just too much free content to be had to wanna pull out your card.
It's funny. Dick Tofel hasn't been head of Dow Jones corporate communications in years and yet here he is, still defending and promoting that corporation, even though it's been subsumed by News Corp. and produces a paper that bares not the slightest resemblance to the WSJ Tofel says he loved.
Today's WSJ is a quicker read than its predecessor, but a much dumber one, too. There's no insight or behind the scenes info on how things come together or get done.
Mr. Tofel should bemoan the fact that fewer readers can bill their employer to receive the WSJ. If they are paying for it themselves, as I have been, they might notice that Murdoch and friends jacked up the price to $2 a copy, but took out all the information that made the WSJ worth reading every day. Less info for more money? I'll pass, and I suspect many other long time WSJ readers will, too. As for others who might want the new WSJ's quicker, less informative take on things, I'd suggest that both USA Today and the New York Times offer not only a better sports and arts sections, but more news and information to boot.
'Would You Pay to Read This Story?'
Nope. Next!
As the founding editor and later publisher of WSJ.com, I have no question that people will pay for valuable content online, especially if you create a huge bundle of content and features, as we did at The Wall Street Journal Online. But it is worth noting that the bundle of content and services included in a WSJ.com subscription has a value far in excess of what is charged for WSJ.com. It includes the contents of the print Journal (full price over $150/year), plus nearly all of the contents of the real-time Dow Jones Newswires (estimated cost at least $500/year), plus extensive archival research capabilities (Dow Jones Factiva price probably $500/year). Price of WSJ.com: about $100/year.
Translating these economics to other publications that can bundle far less value into a subscription is more challenging.
English grammar ropey in first para after intro, above
' .. its product [singular] .... newspapers may' [plural]
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