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WSJ's Online Subscriptions Outperform Print
ScentCone writes "The New York Post is reporting that the Wall Street Journal's parent company, Dow Jones, is doing much better with its online publication than with print. Online subscribers pay $84/year, whereas print subscribers are still paying $356... and the profit on the online business is 20 times that of the paper flavor." From the article: "'They're simply losing market share to other media. Print publishing is not a profitable business for Dow Jones anymore,' said Feinseth. Kann is hoping that the company's long-range growth also comes in online publishing, which has profit margins at least 20-fold higher than print. The Wall Street Journal Online is signing up thousands of new subscribers, up 5.2 percent for the quarter, to a total of 731,000."
This makes sense to me, especially when you are dealing with the chaotic and capricious world of finance. It's nice to have a paper with you, sure, but with the ever changing world of business, you need to have now headlines now, and yesterday's news may be obsolete by the time it gets to your door.
For all of those of you out there who missed the satire here (oh gosh I hope it's satire) please read.
They are in the same business yet the online is making 20 times the profit of print. Take the online subscription fee of $84 per year / 20 times the profit = $4.20 per year is the expected price for subscriptions.
Notice that what is being done is that the total revenue per subscriber is being divided by the profit ratio. This makes no sense. That $84 per customer per year is used to pay for the infrastructure, staff, etc. to provide the service. Let's say that $80 per customer per subscriber. That leaves $4 in profit. Which would mean that the paper version makes $.20 per subscriber per year. My point is not the exact numbers, but that the basic mathematics used is WRONG! You cannot divide revenue by a profit comparison ratio and come up with a meaningful subscriber cost.