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November 13, 2007

Murdoch Serious About Tearing Down WSJ.com’s Subscription Wall

Erick Schonfeld

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Rupert Murdoch

Originally uploaded by duncandavidson

When Rupert Murdoch first went after Dow Jones, he suggested that he might take down the Wall Street Journal’s online subscription wall. Well, it looks like he is going to actually do it. He told a group of investors today in Australia:

We are studying it and we expect to make that free, and instead of having one million (subscribers), having at least 10 million-15 million in every corner of the earth.

The WSJ.com is one of the few remaining mainstream media sites that charges a subscription. (The New York Times gave up on its premium subscription service, TimesSelect, in September). The WSJ.com is also one of the few such successes, with about one million paid subscribers bringing in $50 million a year. But the prospect of 10 million or more visitors coming to a free site changes the calculus.

For instance, the WSJ.com could probably get a $25 CPM (cost per thousand) for its ads, maybe higher. Assuming it could show a conservative 20 ads a month to 10 million Website readers at a $25 CPM, that right there is $60 million in annual revenues ($25/1,000 visitors X 20 ads/month X 12 months X 10,000,000 visitors = $60,000,000).

Add in the fact that search engines will have an easier time finding individual stories and bloggers will be able to link to them, and those number can go even higher.


(Photo courtesy Duncan Davidson, taken at this year’s Web 2.0 conference).

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This entry was posted on Tuesday, November 13th, 2007 at 11:42 am and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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  1. faceloop

    November 13th, 2007 at 11:48 am

    CPM is usually related to impressions…not visitors.

    Using impressions as the multiple would increase your calculations significantly - assuming each of the 10 million visitors views 2 pages or more.

  2. faceloop

    November 13th, 2007 at 11:49 am

    re-read…my bad.

  3. Michael

    November 13th, 2007 at 12:00 pm

    The organic traffic alone would increase ten-fold. However, print subscriptions would decrease significantly if everyone can read the stories on the Internet for free.

  4. Greg

    November 13th, 2007 at 12:06 pm

    As @Michael notes, print subs will fall off and the dead-tree edition surely pulls in more dollars per ad (for now, at least) than online. Also, WSJ.com’s current subscriber base is a lot more resilient than ad spending will be if the economy really heads south. So, as someone who enjoys the WSJ but doesn’t subscribe, I applaud the move. But, from a financial POV, the wisdom of such a move is hardly a settled matter.

  5. Anewday

    November 13th, 2007 at 12:16 pm

    @3

    Print is dead, they need to bury it.

  6. Pran Kurup

    November 13th, 2007 at 12:18 pm

    When you have a targeted subscription base you should be able to charge higher for Ads than you can when you open up the floodgates of traffic to all and sundry. So making it free might not necessarily mean an increase in ad revenue.

    If I am not mistaken, the WSJ was free for a short period of time when they first launched years back before switching to a subscription model. This could mean that the this option was probably considered before News Corp stepped in.

  7. jbwebs

    November 13th, 2007 at 12:22 pm

    $25 CPM… keep dreaming. $1 CPM, maybe.

  8. dailytwitter

    November 13th, 2007 at 12:23 pm

    hey guys check the article you have spelling mistakes….

    shurely shome mishtake

  9. Becks

    November 13th, 2007 at 12:26 pm

    ’bout time!

  10. Abhishek

    November 13th, 2007 at 12:29 pm

    As I said back in early August, he should do it.

    http://abhishek.tiwari.com/200.....over-time/

  11. gilltots

    November 13th, 2007 at 12:30 pm

    i hope they do make it free…if they need to cut costs they can always fire the guy that does those stipple drawings of people..

  12. Simon

    November 13th, 2007 at 12:58 pm

    Do you not think they already show ads and make extra money from those that serve their million subscription customers?

    That would increase their $50 million substantially already.

    What a great dilemma to be in though…

  13. Scott

    November 13th, 2007 at 12:59 pm

    The online version is already much much cheaper so I am not totally sold on the thought that it will kill the print version to offer WSJ.com for free. I think that there are still plenty of people, although numbers are declining, who still prefer a printed newspaper.

    I am an online subscriber and would love to eliminate that bill!

  14. dave

    November 13th, 2007 at 1:03 pm

    this is great news, and a brilliant idea…i pay for print only, read it every morning (and saturday) and got online for free in a promo - but i rarely use the online version unless i’m clicking through to a link of an older story (because i’m reading it in print daily)…

    of interest: would any users be willing to still pay for advanced market monitoring tools and other wsj exclusives?

  15. www.CARversation.com

    November 13th, 2007 at 1:56 pm

    this is just awesome great made my day news. i’m subscribed so now i cancel it soon, this is so cool, it would make sense to have more people.

  16. Ted

    November 13th, 2007 at 2:13 pm

    So you’re saying that if they can get 10x the amount of people, at the very height of the ad market, they can make $10m more.

    I may be the only one, but it sounds like the subscription option is a better one.

  17. Carl

    November 13th, 2007 at 2:26 pm

    I, too, am pleased with the idea of a free online WSJ, though wonder about the business sense of such a move. Besides the ideas listed above, I also believe that it will lower the depth of readership. When I paid for a NY Times subscription, I tended to read much more of the paper. Now that I read it for free on the web, I tend to be more choosy about the articles. Maybe that has more to do with having less disposable time than with quality or some later-in-life development of ADD.

    There is a part of me, though, that will always enjoy holding a newsprint based (dead-tree) paper. It’s just not the same sitting in my easy chair on a Saturday morning with my laptop.

    dave, yes, I think there is still a market for their advanced monitoring tools. I believe Forbes still has some similar offerings, though I don’t know how well they perform for them.

  18. dusty bottoms

    November 13th, 2007 at 2:31 pm

    the current ad com is higher than $25. And worth it since it’s a qualified audience. Going free pits it on the same level as forbes and CNN money.

  19. Matt

    November 13th, 2007 at 2:47 pm

    There is no way to know how much the traffic to the site will increase if the info is free. The only way to know is what the current traffic is relative to people leaving the site once they encounter the login box. Also, not sure I buy the idea that print would decrease. I know that has occurred with other publications, but you have to consider the group of individuals who read WSJ. Not exactly technically savvy and early adopters.

    Last point. There is a value to having customers willing to submit CC info and pay a subscription. That value needs to be considered when changing over the model of the business like this. Just my opinion, I could be wrong.

  20. suzane

    November 13th, 2007 at 2:52 pm

    this is a great news!!!

  21. rfre

    November 13th, 2007 at 2:55 pm

    Murdoch is smart. They could easily make more than $50 million on advertising. Tear down this wall!

    @7 - I hope you were joking about the $1 CPM. They have advanced targeting and could easily get away with a $25 CPM. The only time you’ll see a $1 CPM is on your crappy blog.

  22. rfre

    November 13th, 2007 at 2:57 pm

    To follow up on my last post, they are currently charging up to a $90 CPM for premium ads. Check it out for yourself:

    http://advertising.wsj.com/online/rates/index.html

  23. Emon

    November 13th, 2007 at 3:22 pm

    It’d be stupid not to take down the subscription wall. If the company doesn’t find a way to make Fox Business Network and WSJ work (with a little MySpace sandwiched in)…this whole acquisition would just be a waste.

    No matter what people think of him, Murdoch doesn’t waste time or money to acquire something and sit on it. That’s because time is something he can’t buy more of. Catch my drift?

  24. Tim

    November 13th, 2007 at 4:02 pm

    Although anyone can get $1 eCPM with a standard blog, news sites actually have a pretty tough time selling ads on various topics. Not many advertisers would like to see their message next to the latest terrorist bomb blast or corruption lawsuit.

    Yes the technology, finance and other sectors can do very well and be generating over $25 eCPM, the general news parts of the site would be very lucky to do so (Stated CPM prices are generally quite overstated). WSJ may be a very trusted brand, but as an average I think over $10 - $15 eCPM is pretty optimistic.

    Nonetheless, they would have more than one ad per page making their per page CPM between $20 and $30 for two ads - making the rest of the calculations work in my understanding at least.

    Also, getting only 20 pageviews per month per user is pretty low. I am from the UK and don’t really use WSJ or NYT as resources much at all, but probably see about that many pages on them per month anyway. I probably read about 10 times that on the BBC and double it on The Times or The Guardian and I wouldn’t consider myself atypical.

    -Tim

  25. Matt Milosavljevic

    November 13th, 2007 at 5:02 pm

    How amusing, Murdoch casually walked past me yesterday as I was walking to work in the morning. I actually thought about asking him whether he would open up the WSJ site but thought better of it.

  26. rfre

    November 13th, 2007 at 6:28 pm

    @24

    “News sites actually have a pretty tough time selling ads on various topics. Not many advertisers would like to see their message next to the latest terrorist bomb blast or corruption lawsuit.”

    If the ads are targeted to the person’s interests and demographics, it doesn’t matter what the content is surrounding the ad. WSJ has some pretty advanced behavioral targeting capabilities that would make a $50+ CPM worthwhile for a lot of higher-end clients.

  27. dave platter

    November 15th, 2007 at 3:25 pm

    I think worries about the decline of print subscriptions are valid. But, Murdoch’s team must be thinking of the same. There’s no reason to expect them to leave the print edition unchanged.

    I imagine they have plans for revising the print edition to take best advantage of the medium, even as they evolve the web edition. What does that mean? I’m no expert. Does any one have any ideas?

  28. Dan

    November 17th, 2007 at 11:38 am

    I do not want wsj.com to be free. I do not want to be barraged by ads when trying to read and think about the articles and data in the wsj. I already detect an increase in ads in the print version. If the website is made free, the ads will increase and become the focus at the expense of the great journalism of the wsj. I hope this doesn’t come to pass, but I am not sentimental and will drop my subscriptions if it gets bad. That would be a very sad day.

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