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Murdoch announces his Wall Street Journal online publishing strategy

Why settle for one million subscribers, when the revised online publishing strategy by the News Corp. Chairman expects 10-15 million?

When you pay $5.2 billion for the leading financial daily and one of the most widely read U.S. newspapers with a circulation of more than 1.7 million, you’d better have an online publishing strategy for recouping some of your investment.

Earlier this year, Rupert Murdoch, billionaire media mogul, founder and CEO of News Corp., the parent company of such broadcasting networks as FOX and Sky, announced plans to acquire Dow Jones & Co. The company publishes The Wall Street Journal, the leading financial daily and one of the most widely read U.S. newspapers with a circulation of more than 1.7 million.

Dow Jones also publishes The Wall Street Journal Europe, The Wall Street Journal Asia, and financial magazine Barron’s, as well as a portfolio of community newspapers through its Ottaway Newspapers subsidiary.

In an effort to recover some of his investment, Mr. Murdoch previously announced he plans to sell Ottaway’s eight daily and 15 weekly newspapers. Tuesday (November 13, 2007) he announced he intends to make access to the Wall Street Journal’s website free, dropping subscription fees in exchange for anticipated advertising revenue.

“We are studying it and expect to make that free,” Murdoch said. “Instead of having one million, having at least 10 million or 15 million in every corner of the earth.”

A free website providing many of the content features of the Journal would attract “very large sums” of advertising, Murdoch said.

WSJ.com is currently one of the few news sites successfully running a subscription model with its online publishing strategy. The website currently has about one million subscribers, paying about $50 million a year in fees to access all parts of the site.

The social networking site MySpace was acquired by News Corp. via its $500 million purchase of parent company Intermix in 2005. MySpace makes it easy for users to create a personal profile page, which can be enhanced with HTML code and turned into a multimedia web page. The MySpace business model and online publishing strategy also depends almost entirely on ad sales.

Following The New York Times

In September (2007),The New York Times announced a change in its online publishing strategy, and stopped charging for access to parts of its website. The move came two years to the day after The Times began the subscription program, TimesSelect, which has charged $49.95 a year, or $7.95 a month, for online access to the work of its columnists and to the newspaper’s archives.

In addition to opening the entire site to all readers, The Times now makes available its archives from 1987 to the present without charge, as well as those from 1851 to 1922, which are in the public domain. The Times charges for some material from the period 1923 to 1986.

The Times said it had been drawing 227,000 paying subscribers — out of 787,000 over all — and was generating about $10 million a year in revenue prior to making access to the website free.

The Times said the change from fee to free was warranted when management realized that many more readers started coming to the site from search engines and links on other websites instead of coming directly to NYTimes.com.

“These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue,” the newspaper said.

According to Nielsen/NetRatings, The Times’s site has about 13 million unique visitors each month, far more than any other newspaper site.

“The business model for advertising revenue, versus subscriber revenue, is so much more attractive,” said Colby Atwood, president of Borrell Associates, a media research firm. “The hybrid model has some potential, but in the long run, the advertising side will dominate.”

Mr. Atwood said that there have always been reasons to question the pay model for news sites, and that doubts have grown along with Web traffic and online ad revenue.

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