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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."
How many people (like me) do both. Existing print subscribers can add the online service for $39 per year. I prefer to do most of my reading from the print version, but the interactivity of the online is also frequently useful....
The more publications go online successfully, the more demand there will be for ebooks and other portable reading devices, the quicker we'll finally get usable cheap ebooks.
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
It would seem that way, wouldn't it? But the reporting and writing that paper does is superior to just about everyone else. I'm willing to pay the amount they're demanding. Am I stupid? Maybe. But I think the other alternatives are definately not worth their price.
And I'd lik to add that I pay the newstand price ($1) because the WSJ is a data whore. When I did subscribe to them, my junk mail increased about three fold.
I worked for a small company, where we were profiled in WSJ. This was quite a big deal since our company consisted only of 5 employees at the time. We wanted to put the article on our website. WSJ informed us, licensing the article was about $500/mo. Seems kind of high since the article was already written, and we weren't reselling the article.
Nevertheless, we paid it for several months.
There's talk of how the e-WSJ is much cheaper to produce (no trees killed, no drivers to deliver it, etc.), but go into any bathroom at any brokerage firm and the stalls are littered with copies of it. The hard version makes the copy version cheap to produce because they already have the infrastructure available to easily produce it online. There aren't many web-only publication names that we trust, yet. The old school names legitimize the new school medium (WSJ, NY Times, Wash Post, AP vs. DrudgeReport). I'd be interested to see how accounting divides up the costs of reporters, editors, phones, office space, etc. between old and new media.
The WSJ unlike most newspapers today still does a lot of its own research in detail. They have a large staff and they give them the time to turn out quality articles. Further the cost of distribution is high. Even in affluent neighborhoods a small percentage of the people want a speciality newspaper.
The WSJ costs a lot because its much more expensive to produce than your average newspaper. I'm glad they are making money they produce a quality product and they deserve it (with the exception of the editorial page which is junk).
Could you tell me how you got that (sic 4.20 per year) out of the article?
Come-on now I don't have an MBA it is simple math though....
All right I'll explain, just from the article text:
Wall Street Journal is in the news reporting business; therefore, can be used as a simple benchmark for profitability in the line of business.
The comparison between print and online is that the print is making a given profit and the online is making a given profit. 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.
If you wanted to compete, I suspect that you could charge $4.20 per year and be competitive. Therefore, there will be a lot of online news reporting sources in the future that will drive competition to the $4.20 mark.
We don't know what the cost of either the print or the web editions are. We do know the price.
If the cost of the print edition is $355 and the cost of the web edition is $64 (both cost figures amortized over the size of the subscriber base) then the profit is 20 times. (profit of $1 and $20 respectively)
Another solution could be the print edition costs $354 and the web edition cost $44 ($2 and $40)
In other words, we don't have enough information to determine where a parity will be reached.
Kudos to WSJ for making it work.
Many have criticized newspapers who charge for online access, saying it will never work, etc. On the other extreme you have websites that are "supported" by endless annoying popup and flash ads, or by making you look at the ad before getting to the page you wanted.
Some people don't mind paying for quality content that is useful to them. WSJ has realized this and tapped into a good market.
I don't subscribe to WSJ, but I do subscribe to Investors Business Daily. I switched to the online version as soon as it was available. Advantages and disadvantages are probably the same as online WSJ.
Benefits of online version:
0. Fewer dead trees.
1. No stack of old newspapers in my house.
2. I don't have to haul a stack of paper to the recycling center.
3. Available shortly after the markets close instead of the next morning.
4. I can read it with my breakfast without venturing outside in yucky weather.
5. If I miss a few days, the past week's editions are online.
6. I can download the PDF version to archive, view on my Palm, or whatever.
Disadvantages:
1. Dead tree version makes better kindling for the fireplace.
If God had meant for man to see the sunrise, He would have scheduled it later in the day.
So, using the same kind of logic that the movie/record companies employ, each online subscriber is stealing $272 from the Wall Street Journal. They weren't going to pay for it, and yet they still get a copy.
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http://online.wsj.com/article/0,,SB111160514010687 816,00.html?mod=home_whats_news_us
which if you are not already logged in, takes you to the log in page. However, if you insert the word public before the word article like so...
http://online.wsj.com/public/article/0,,SB11116051 4010687816,00.html?mod=home_whats_news_us
You are taken right to the story. Even better, if you make the URL look like this...
http://online.wsj.com/public/article_print/0,,SB11 1160514010687816,00.html?mod=home_whats_news_us
You get the story with out any annoying information surrounding it.
That's 1.7 microns! A human hair is about 100 microns. High end litho presses run about 900 lpi.
'SBEMAIL!' is better than a goat!!