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Print Profit Goes
Online: What WSJ's Counting of Web Users Means to
Publishing |
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10
November 2003 |
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The power of online news outlets became
abundantly clear when
The Wall
Street Journal announced that its paid circulation
surged 16 percent in September - based on the inclusion of
online-only subscribers using its WSJ Online site. This is
a seminal event in the maturing of the Web as an outlet for
premium content, but at the same time it may be somewhat
deceiving in its assertion of the value of current models
for premium online content. The Journal has some unique
assets that may make its model somewhat difficult to
translate for others following in their footsteps - and
some common liabilities that may make other routes more
advisable in the long run. |
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While
The Wall Street
Journal is the most widely recognized financial broadsheet
in the business of print news publishing, the Journal and its
parent Dow
Jones & Company, Inc. are hardly newcomers to making money
with electronic content. Dow Jones was spinning out
telegraph news for business before the Wright Brothers had ever
flown, and has long learned to balance and orchestrate its
print media assets with its ability to deliver content via
computer networks. WSJ was the first major news publisher to
implement Web subscriptions for its online edition - a
much-derided decision in the heady days of dot-com fever, but
one that has now come full circle to salvage the stability and
growth of profitability at Dow Jones. As
reported by WSJ Online [PREMIUM], the Journal reported a 16
percent circulation gain for the six months ended Sept. 30 as
it included significant portions of its paying online
subscribers for the first time. Because of the Audit Bureau of
Circulations rules for counting paid subscriptions only about
290,000 of its 400,000 online-only subscribers could be
counted, but even at that rate it transformed near-flat numbers
from its print side into a newly optimistic picture for news
publishing.
The Wall Street Journal was hardly alone
in its print woes: virtually every major print outlet has been
struggling with flat sales, in spite of an easing economic
environment. Up until this point, newspapers and other print
outlets reliant on ads could afford to pray for rain, awaiting
an upturn. But the decision of the Journal to cash in on its
online base changes the complexion of that waiting game
significantly. For years most ad-based print publishers have
hesitated to attract their core subscribers away from its print
editions to online sites, in large part because it would
detract from the paid circulation numbers that support print
advertising rates. This strategy has failed to do anything to
strengthen the inevitable decay of print as a profitable and
expandable medium, while ads on free online sites that cannot
demand print-scaled pricing are not filling the profit gap
completely. The Journal has signaled loudly and clearly that
the future of premium news publishing has to grow from online
outward, not print inward. But is WSJ Online's model the true
solution for other news outlets to apply - or even for the
Journal itself in the long run? Here are a few key factors to
bear in mind when trying to convert print sales to highly
profitable online presences:
- Look at the content model before
the revenue model. The WSJ team prides itself on having
had a dual-purpose newsroom from early on, servicing
financial professionals with realtime breaking news while
collecting relevant news and more contemplative pieces for
its more leisurely print edition. There are very few news
agencies that can claim such a profile, and few papers that
still can lay claim to providing breaking news on a
consistent basis. While the Journal does little to exploit
this realtime capability in its online presence outside of
some key news alerts now and again - in part to protect its
high-end realtime news feed sales - the ability to generate
definitive, market-moving realtime financial content is at
the heart of the Journal's ability to command premium online
prices. Simply putting up a for-sale sign on content that
does not actively leverage the unique value of electronic
content delivery from the editorial function on out for
specific audiences may not convince subscribers that it's
worth the price of admission.
- Look beyond print conversions to
pure online competition. The Journal's ability to convert
its prestigious print outlet's reputation has given it a
strong advantage for online sales that others with similar
strengths such as the
Financial Times
have decided to emulate with premium online sales. But while
these international news juggernauts vie for market share,
new online sources such as
CBS
MarketWatch have sprung up which owe no allegiance to old
business models - and which provide not only
registration-based Web presences but breaking news in
professionally-oriented feeds and content technologies for a
premium. While currently lacking the prestige of print-born
sites, the ability of these outlets to carve away at both
consumer and professional traffic with no care for the
limitations of protecting print bases pose a far stronger
long-term threat than many paper outlets would like to
believe. Print outlets that have already moved beyond
print-bound subscription models for online sales may be
better positioned in the long run for profitability..
- Look beyond pure content models to
content technology models. WSJ Online and other premium
outlets apply many "best practices" in the design and
tailoring of their Web presences, including advanced content
technology tools such as market heatmaps, for the most part
these online outlets for traditional premium content do not
stray terribly adventurously into providing their own content
technology tools to add value to both subscribers and
business partners. This combination is at the cornerstone of
the strength of many online-only outlets, some of which act
as suppliers of these tools to WSJ, FT and many others.
Sticking to one's knitting is always a good idea when the
territory is fresh, but increasingly the creation of valuable
content involves not just information conveyance but valuable
and unique experiences that place it in context.
Counting online subscribers as being "as
real" as print subscribers is certainly a significant watershed
in the acceptance of online publishing as an emerging primary
medium for ad-supported subscription sales. But it is as much a
recognition of how much content models are having to move
beyond the world of print-defined content value as it is a
recognition that The Wall Street Journal has implemented a
model to capture print value online. Expect that more print
outlets will implement successful online subscription
strategies, but expect that those that are willing to leap
beyond their online channels being an accessory sales channel
will be the ones that will see the most significant growth in
revenues in the next few years.
-
John Blossom
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