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Why Rupert Murdoch will not make the online Wall Street Journal free. And shouldn’t. 8/6/07

Posted by Steve Boriss in Wall Street Journal.

Blogs like Corante are buzzing that new Wall Street Journal (WSJ) owner Rupert Murdoch might want to stop charging subscription fees for its online edition to greatly increase traffic and, presumably, ad revenues. This is such a bad idea, it makes me wonder whether the New Media is catching a case of dinosauritis from Old Media.

Why do so few notice the lesson that Google has taught us about how to make money from the web? They make money not because their site draws so much traffic, but because it draws the right traffic – very specific visitors finely parsed-out among a limitless number of pages defined by each user’s interests as expressed in their keywords. So, Google’s advertisers reach highly segmented audiences consisting only of their best sales prospects – an advertiser’s dream. The online WSJ has a similar gig — every time someone subscribes they might as well be on Google entering keywords that read, “I’ve got extra money to invest, and am willing to pay to receive new information that might change my investment decisions.” For some advertisers, isn’t that a highly segmented audience of tremendously good sales prospects to die for? This all goes away if the online WSJ were to become free.

The power of Old Media was its ability to reach large numbers of relatively undefined prospects through very few channels – terrific if you are a McDonalds’s with everyone as a potential customer. But for all other advertisers, there’s New Media, which has the power to deliver specialized audiences of only the best prospects. “Segmentation” is the new “traffic.”


1. nigel barlow - 8/7/07

Interesting point Steve,

The think that the WSJ is a very specific market rather like the FT over here which is read only by a small amount of high income very segmented people.
(Incidently the FT did at one time charge subscription here but as with other newspapers,it didn’t work)

Personally I don’t beleive that Murdoch will go down the route of scrapping subscription fees and thus diluting the traffic to the site.The journal has a very highly segmented readership and the risks of losing that advertising niche must outweigh the alternative

2. Steve Boriss - 8/7/07

Nigel, Agree. I would not rule out, however, the WSJ developing some other type of online edition that is free, or changing the content of their subscription edition so that it is even more valuable to its segmented audience. Seems like with its ownership of Dow Jones financial wires it could be made into an even more indispensable product for investors.

3. Fiaz Sami - 8/7/07

I think the mass consolidation is in response to the equalization force the internet has upon the media. As the internet becomes the most popular medium for transforming information it will become even more vital for larger media companies to try and maintain their stranglehold on how people get their information. I personally believe that Rupert Murdoch is playing the game correctly by mass consolidation. I strongly believe that a free edition of the WSJ would be an excellent way of drawing people into the Murdoch brand.

4. Steve Boriss - 8/7/07

Fiaz, While Murdoch has a reputation for “mass consolidation,” I think his track record is more often about making money by splitting-up conglomerations that he believes are under-serving particular market segments. In London, he made the Sun more “Tabloidy,” differentiating it from the more staid Times of London. He made the NY Post more tabloidy and conservative, differentiating it from the NY Times and Daily News. He created Fox to break-up CNN’s consolidation on cable. I think he will make the online WSJ even more targeted to the investor class, while using the main paper to break-up the consolidated combination of the NY Times and Wash Post.

5. Links from last week - 8/9/07

[…] recent acquisition of the Wall Street Journal by Rupert Murdoch was the perfect excuse to debate and review the “paid content” model some media outlets are using today on the […]

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