Fred is right and Rupert is wrong

by Mathew on January 24, 2008 · 12 comments

As the Wall Street Journal is breathlessly reporting, Rupert “Just Try and Stop Me” Murdoch has apparently relented on his much-discussed plans to open up the Journal’s content and get rid of the paywall, and will be keeping some subscription products (and boosting the price for them, oddly enough) while letting more stuff move outside the wall. In other words, he will be trying to have his cake and eat it too.

I know that there are a lot of smart people out there who believe that you can do both — one of them being Rex Hammock, who has been predicting for some time that Rupert would see the light and go for a mixed strategy. I would not claim to have the expertise in publishing that Rex has, but I do know one thing: the kind of content that newspapers produce, in virtually all cases including the esteemed WSJ, is either a commodity (in which case charging for it is nonsensical) or something with added value. In both cases I think it benefits the paper to release it into the wild.

Obviously if it’s a commodity then it should be free. But I would argue that it’s almost more important for the added-value content to be free as well. And here I am in violent agreement with Fred Wilson of A VC, who says that he believes Rupert has made a big mistake by keeping content locked up. As he puts it in his post on the topic:

“Here’s the deal. Digital media is not about scarcity and never will be. That’s the old media game. Online it’s about ubiquity, about being part of the conversation, about links, authority, page rank, and if you are a news organization like the WSJ – its about anchoring the discussion.”

This is the same debate that the New York Times went through, and it eventually decided to get rid of the wall. Was it not making money? No, it was making plenty of money — but that pie wasn’t growing. And it certainly wasn’t growing as quickly as the NYT’s traffic has been since it removed the wall. I think the Journal would be wise to trade the bird it has in its hand for two or three (or twelve) in the bush.

  • http://paul.kedrosky.com Paul Kedrosky

    Surprised you tumbled for this one, my friend. As I pointed out earlier today on my site, the headline writers have the story backwards. Murdoch says he is he is greatly _expanding_ the free parts of the WSJ. sure, some things will remain premium and become more expensive, which is just another way of saying that the Dow wire, DJNR, and some data services won't be free. Zero surprise.

  • http://www.mathewingram.com/work mathewi

    Yeah, it does sound as though the free content is going to be expanded –
    which makes it kind of odd that the Journal would play the story the way it
    did. Maybe Rupe is trying to have his cake and eat it too with the story
    about the story :-)

    If it's just the Dow wire and DJNR and all that behind the wall then I don't
    care as much. But do we know that there's no regular newspaper (i.e.,
    non-data) stuff staying behind the wall?

  • http://rexblog.com Rex Hammock

    Matthew, I think the WSJ will get rid of the pay wall on most of the news and features and information that comprise what most general business readers think of as WSJ.com. I think the company will try to convince “subscribers” there's value in continuing to subscribe by adding limited access to more “business-to-business' type of data and information that's under the “Dow Jones News-service” brand today — or perhaps Factiva or some of their other premium business information services.

    My theory has been that nearly anything you can find in the paper will be — and should be — free on WSJ.com. The “expensive” stuff will be the type of data Dow-Jones provides professional traders and money managers and other business “clients” who are using the highly specialized information for critical — or instantaneous — decisions. I'm sure during the past few days when billions of dollars were made or lost in financial markets, the professionals who were managing those assets (or the rich guy managing his retirement account) would have paid a premium for whoever could provide the most dependable, accurate and quickest information available.

  • http://www.mathewingram.com/work mathewi

    I hope you're right, Rex. It's not clear to me what exactly is going to
    remain for-pay in this new model, but if it's the kind of things that you
    and Paul are talking about then it makes sense — the strictly data-oriented
    services, the Factiva stuff or whatever. I'm okay with that (I'm sure
    Rupert will be relieved). It is kind of odd the way the Journal played the
    story though, as Paul notes.

  • Dave Ingram

    Oops I did it again! Got the story wrong.

    One of the 7 habits of highly effective people is: “seek to understand before being understood”

    You and so many other bloggers are so desperate to make it first with a story on to Techmeme you often forget to check your facts and your supposed to be a professional journalist!?

  • http://www.mathewingram.com/work mathewi

    Hey, Dave — relax. There was a misunderstanding — and not just by me, but
    lots of other people too. You want to talk about professional journalists?
    Talk about the way that WSJ headline and story were written.

    Anyway, everyone understands each other now — no harm done. Welcome to the
    Internet.

  • http://www.storyofmylife.com antje wilsch

    Blogging in general to me still seems like passive “journalism” and much more opinionated and reactive towards news than traditional journalism. I don't see bloggers jumping on planes to Afghanistan or Kenya (or even the front door of Heath Ledger's apartment building for that awful matter) to report on news. They let journalists dig, do research, and come up with stories, and then react to them. Blogging has a definite, and positive role to fill in the “new media” era but I don't seem bloggers who sit in front of their screens being fed data and blogging on it replacing paid journalists any time soon.

  • Harold

    I don't understand why either your or Fred make these pronouncements without actually considering any numbers.

    In order to replicate their subscription income, WSJ.com needs roughly 10x more traffic, and that's assuming today's high CPM rates and that they would get close to selling our their inventory. Do you really believe it's possible for WSJ.com to hit 50m monthly uniques? Not unless they totally dilute their content by covering stuff that's irrelevant to their core audience.

    As I wrote on Fred's site, WSJ.com can be just as much a part of the conversation by adding blogs and other inexpensive free content and still maintain a lucrative subscription option.

  • http://www.mathewingram.com/work mathewi

    Thanks for the comment, Harold. I have considered the numbers (although I
    didn't mention them in this particular post). I think CPM rates for
    high-value content like that produced by the WSJ will inevitably increase,
    but that's not why I think they should do it. I think that the value they
    will get out of all of their properties — including the print version –
    will be enhanced by making their content more a part of the broader
    conversation. Obviously I don't have any numbers to prove that, but
    nevertheless I believe it.

  • http://www.storyofmylife.com antje wilsch

    Blogging in general to me still seems like passive “journalism” and much more opinionated and reactive towards news than traditional journalism. I don't see bloggers jumping on planes to Afghanistan or Kenya (or even the front door of Heath Ledger's apartment building for that awful matter) to report on news. They let journalists dig, do research, and come up with stories, and then react to them. Blogging has a definite, and positive role to fill in the “new media” era but I don't seem bloggers who sit in front of their screens being fed data and blogging on it replacing paid journalists any time soon.

  • Harold

    I don't understand why either your or Fred make these pronouncements without actually considering any numbers.

    In order to replicate their subscription income, WSJ.com needs roughly 10x more traffic, and that's assuming today's high CPM rates and that they would get close to selling our their inventory. Do you really believe it's possible for WSJ.com to hit 50m monthly uniques? Not unless they totally dilute their content by covering stuff that's irrelevant to their core audience.

    As I wrote on Fred's site, WSJ.com can be just as much a part of the conversation by adding blogs and other inexpensive free content and still maintain a lucrative subscription option.

  • http://www.mathewingram.com/work mathewi

    Thanks for the comment, Harold. I have considered the numbers (although I
    didn't mention them in this particular post). I think CPM rates for
    high-value content like that produced by the WSJ will inevitably increase,
    but that's not why I think they should do it. I think that the value they
    will get out of all of their properties — including the print version –
    will be enhanced by making their content more a part of the broader
    conversation. Obviously I don't have any numbers to prove that, but
    nevertheless I believe it.

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