’s barbell strategy

By Felix Salmon
April 9, 2009

Zachary Seward has an interesting interview with’s Allan Murray, who is sounding reasonably similar to the FT’s Rob Grimshaw, although even Murray says that he finds’s bizarre business model “very confusing”.

The WSJ seems to be moving towards something of a barbell strategy here. On the one hand there’s a lot of free content: Murray lists not only “all our political coverage, all our opinion coverage, all our arts and leisure coverage”, but also any “big news story” as the kind of stuff which anybody should be able to read for free. Plus, of course, there’s any story which you get to via Google News.

At the other end, there’s very expensive niche content:

I think what you have to think about is sort of narrower groups of interest where the interest might be deeper and more intense and therefore might make people willing to pay for it…

We’re working on a premium initiative to launch a series of, as you say, niche or narrower information services that we can sell at a premium to smaller groups of subscribers on subjects that they care most about.

The FT has already started going down this road, with the launch of its China Confidential product. There have been three biweekly issues so far, and a subscription will set you back somewhere in the £2,000 or $3,000 range.

How many subscribers does China Confidential have? One, I think, although the number might have risen all the way to three or even four. There will probably be more, but I’m not at all convinced that this kind of business is a smart one for the FT and WSJ to be in.

I’ve spent a fair amount of time among both FT and WSJ reporters, on the one hand, and financial trade-magazine and newsletter journalists, on the other. Essentially, the FT and the WSJ are trying to move in to the newsletter space — but are trying to do so with their present cadre of reporters. And newspaper reporters don’t tend to be nerdy enough to get excited by the finer details of the platinum-molybdenum relative-value play: they’re always more interested in the big stories.

What’s more, FT and WSJ reporters have a habit of believing that they’re extremely good, just because they get big stories. But of course it’s always much easier to get a big story if you can say you’re calling from the FT or the WSJ than it is if you say you’re calling from some publication which will only be read by a handful of super-premium subscribers.

Indeed, there might well be an element of bait-and-switch going on here: WSJ reporters will get stories wearing their WSJ hats, only to publish them behind ultra-high subscription firewalls which are impenetrable to the overwhelming majority of WSJ subscribers. This is unlikely to impress anybody — not the sources, not the subscribers, and not even the suits, who will eventually realise that their franchises are built on having reach. The FT’s Lex column, for instance, is influential precisely because it’s read by hundreds of thousands of commuters on their way in to work in the morning. The more expensive you make it, the less that it’s read, and the less that it’s read, the less influential it is.

My feeling is that Murray’s latest bright idea is doomed. He’s giving away most of the stuff that people want to read, and he’s trying to make money from selling stuff people need to read. The problem is that for all the WSJ’s astonishing levels of self-regard, there’s precious little of that material out there. Open the paper and ask yourself how much of it really isn’t replicated, for free, anywhere online. The answer is that there’s very little — certainly not enough to persuade hundreds of thousands of people to pay good money for an online subscription.

When people subscribe to, they do it because out of a desire for convenience: the knowledge that they can get whatever they want in one place. They’re not, in general, paying this money out of a feeling that they simply can’t live their lives without this particular source of information. And when the WSJ starts trying to charge thousands of dollars for premium content — when it walls off stories even from its own subscribers — a lot of the convenience that people are paying for, the knowledge that all the WSJ’s content is available to them, evaporates. Subscribers hate running into super-premium firewalls: it makes them feel second-class. And it’s the broad mass of subscribers which the WSJ will get the overwhelming majority of its revenue from. It’s a good idea not to annoy them — or they’re prone to start finding their news elsewhere.

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6 comments so far

Interesting article – almost entirely on point.

I was a very early WSJ subscriber many years ago – about $80 for a year. This year’s price increase represents a 50% increase over the past two years ($99 to $159). I canceled my subscription.

The WSJ folks seem to have missed the notion of value – properly priced product that fills a need. The product is good but not so good that it is worth 50% more in a year when the economy and market are down.

My view is that management is either out of touch or focused on premium margins. Tales of geese and golden eggs come to mind.

Posted by Robert Bainbridge | Report as abusive

One morning, sipping coffee, I switched to the WSJ tab on my browser, to find it hung up on a display ad that had blocked the home page until I took action. I cancelled that morning. I refuse to pay and then be accosted by an ad. (Yes, I avoid movie theaters and most DVDs for the same reason.) I switched to Reuters that day and have not vewed WSJ on-line since.

Posted by Tom Burton | Report as abusive

“When people subscribe to, they do it because out of a desire for convenience”

Or maybe just a desire for the occasional grammatically correct sentence? For Pity’s sake man, turning in shoddy work like this is just plain discourtesy.

Posted by Ian Kemmish | Report as abusive

I couldn’t agree with this post more. I work in finance, but off Wall Street. I used to love the WSJ, especially reading the A-heads when I was riding the subway, but when I started getting most of my news on-line a few years ago, I just couldn’t see paying $80 or whatever for something that was no longer What Everyone I Knew Was Reading — especially since if there really was a Must-Read, someone would surely send me a copy or (eek) hand me a copy of the paper WSJ.

I wonder if other people have worked in offices where paper WSJs pile up yellowing and unread just because they are someone’s security blanket.

Posted by SelenesMom | Report as abusive

I subcribe to WSJ.Com for the reason you mentioned – convenience. For relatively little money, I can find what I want quickly. If they raise price, I’ll cancel and get it online for free.

Posted by Brad Ford | Report as abusive

Post-BSC sabbatical, I renewed the WSJ — just before they started adding things like the Sports section. The paper has dropped off a cliff in terms of its usefulness.

Still there is that every once and a while article that I only read while thumbing through the print edition, and that snags me. For this, and only this, do I keep the print edition, thumb through on the way to work, and then get everything else from the Pink Paper. (Btw, they have a fantastic online edition; Google “FT Electronic Edition” and pledge your faux-academia.)

Posted by quantacide | Report as abusive
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