Why Does WSJ.com Charge For Content?

By Reuters Staff
March 23, 2009

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 maxmize 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.

Reprinted from Portfolio.com

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