Rational Exuberance Over Free Content

I'm convinced that WSJ.com, FT.com, along with every other newspaper website, will be entirely free sooner rather than later. Jeff Bercovici, on the other hand, isn't:

Are all the triumphalists ready to rule out the possibility that, somewhere down the road, someone will replicate what HBO did in television, creating programming so good people will be willing to pay for a commodity they were used to getting gratis?

What Jeff doesn't understand is that this is entirely the wrong question to be asking. There's always a group of people willing to pay for online content. Slate and TimesSelect both had subscribers. Salon still has subscribers. Even calendarlive.com, during the short and unhappy time that it was a paysite, had one or two. So clearly the ability to find people willing to pay a subscription charge is not the issue. The issue is whether the benefit of charging it outweighs the costs.

Remember that HBO would never be a broadcast network, so it would never be really free. "Free", in terms of the options facing HBO, means "free once you've paid for a basic cable subscription" – and if HBO ever went down that road, it would severely restrict the network in terms of the content it was allowed to show.

More to the point, if you're paying for a basic cable subscription, you're already paying for television. All that HBO is asking is that you pay more, for more television. The vast majority of web users, by contrast, pay for no online content at all. They may or may not pay an ISP a monthly fee to get online in the first place. But once they've done that, everything else is free, and there's no way that they're going to be able to subscribe to WSJ.com or any other site by paying more to their ISP.

Even in the US, most people never spend a penny online: not at Amazon, not at eBay, not at iTunes, and certainly not for what the likes of Jeff and I somewhat ridiculously refer to as "content". And the web is global, of course – if you start charging for content, you essentially wall yourself off from all but the tiniest minority of web surfers from any other country in the world, no matter how valuable they might be to advertisers.

That said, there will always be subscription sites, generally for trade publications and high-value newsletters – the type of publications where a print subscription costs substantially more than the costs of printing and distribution. But newspapers are very different: by their very nature, they're a mass medium. All newspaper owners want as many readers as they can possibly get, and Rupert Murdoch is no exception. Because of that, WSJ.com will go free, and in turn that will force FT.com to go free as well. And the triumphalists will have been proved right.