Giving Up WSJ.com Subscriber Revenue: The $63 Million Question

Implications: While Dow Jones worries that a free wsj.com could hurt other parts of Dow Jones, Rupert Murdoch will be more interested in a free wsj.com hurting  Dow Jones’ competitors

Analysis: Something funny happened over the past 11 years.  Not only did wsj.com slowly amass 1 million paid subscribers, who now pay Dow Jones an estimated (perhaps overstated) $63 million a year in subscription fees.  But, as The Wall Street Journal and other news sources have reported:

- Google emerged as a company that transformed the media business and grew to have a $200 billion market cap.

- MySpace got invented, got big, got bought by NewsCorp (just like Dow Jones) and got even bigger, now counting more than 200 million members.

- Apple created and sold more than million iPods, sold more than 3 billion downloaded songs through iTunes, and launched the iPhone.

Meanwhile, in other news: the Euro got introduced and Eurozone membership expanded to 316 million people in 13 states, the Chinese and Russian economies boomed, and, oh yes, the world’s population grew by one billion people.

The world has changed. And the reality is this: Millions are willing to spend $5 each day at Starbucks, but only one million people in the world are willing to spend $5 a month for wsj.com.

Dow Jones has always prided itself on being a “content” company, not a “marketing” company.  And The Journal and wsj.com certainly offer great content.  But creating the world’s best business and financial content and asking consumers to pay for it is no longer enough.  There are simply too many other choices, and too many ways the Journal’s most essential news gets disseminated instantly through other free sources.  

While The New York Times has seen web traffic jump to record levels in the weeks since abandoning Times Select, Dow Jones is continuing to think “inside the box” – agonizing over the ways a free wsj.com will cut short-term revenue, accelerate print Journal declines and affect the plans of other Dow Jones businesses like Factiva and Dow Jones Newswires.  (Of course, if Factiva’s and Newswires’ future successes are dependent on repackaging Wall Street Journal content, those business models will need looking at, too.)

There is, of course, another way to look at the The Journal’s situation.  It’s a global, expansive, confident, influential, 24/7, multiplatform, aggressively marketed vision.  It's a vision that aims to put the Journal brand front and center throughout the English-speaking business world and beyond.  It's the vision Rupert Murdoch clearly plans to adopt and enforce.