Why WSJ.com Should Be Free

Saul Hansell wonders whether Rupert Murdoch should really make WSJ.com free from the first day he owns it.

Of course he should.

Fred Wilson has the numbers, which are something of a toss-up. At the moment, WSJ.com subscriptions generate about $75m per year, he says, and going free can beat that:

I think if the WSJ went free online, got its content into the dicussion broadly, got indexed highly in Google, and fully participated in the web in all respects, it could easily see 10mm uniques per month and 100mm pageviews within a year (which might generate as much as $100mm in revenues). That should be the goal, not to remain a niche player in online finance.

What Wilson doesn't include in these sums, of course, is the degree to which print subscribers will give up their subscriptions if they know that all the WSJ's content is available online for free. Without those print subscribers, the WSJ could easily go from making a modest profit to making a very large loss. Which, admittedly, is something Rupert Murdoch is happy to live with, for the sake of market share, as he's demonstrated in both the UK and the US. He's the king of price wars.

On the other side of the argument is Larry Kramer, who's quoted in Hansell's blog as saying that WSJ.com shouldremain the premium product for finance types, while MarketWatch (founder: Larry Kramer) should be the free product for individual investors.

“There is some number of people who will pay for premium business news, and those people will pay a lot,” Mr. Kramer said this afternoon. “Murdoch knows that.”
He added: “For those who won’t pay, give them enough of what they need free. You get the best of both worlds.”
WSJ.com and MarketWatch, Mr. Kramer said, are fundamentally different. The Journal focuses on news analysis for business executives and the sort of scoops that can be printed at any time. MarketWatch is more about breaking news and aimed more at individual investors.
That makes MarketWatch, rather than WSJ.com, a better brand to pair up with the Fox business channel, which will also have an investment focus.

What Kramer doesn't seem to grok is that the potential market for WSJ.com is vastly larger, not smaller, than the potential market for MarketWatch. It's individual investors who are the niche – the number of people who take an active interest in the daily gyrations of the stock market is low, and as people become more educated about finance it should be dropping. Smart individuals know that they aren't going to outperform the market, and that they'd be much better off with an index fund than with the stress of trying to manage their money themselves.

The potential readership of the WSJ, on the other hand, is enormous. Right now, there is no one-stop-shop on the World Wide Web for comprehensive, global businesss and finance news and analysis. A free WSJ.com would overnight become the global authority on such matters. WSJ.com is never going to make much money selling subscriptions in India or Brazil or Russia or even Mexico – but if it became a regular read among the business classes in those countries, local ad reps could make a fortune for News Corp. (Technology nowadays makes it very easy to target ads to readers in specific countries.)

The reason I'm hopeful about Murdoch buying the WSJ is that Murdoch has a truly global outlook, while the WSJ has always seemed to be a bit on the parochial side. And no one with a global outlook thinks that trying to sell subscriptions to WSJ.com makes any sense. Free is clearly the way to go.