The WSJ's Last-Man-Standing Play

Nat Ives talks to WSJ publisher Les Hinton, who explains the paper's move into general news. Is it driven by Rupert Murdoch's desire to compete head-on with the the NYT? Quite possibly, yes. But Hinton's on-the-record justification also makes sense:

"I've read the Journal for 30 years -- more," Mr. Hinton said. "When a big story happened, you'd immediately feel the need to buy another paper. Well, if there's a major earthquake in China, as a recent example, our view is that you should not need to buy another newspaper to know what's going on." As the Journal becomes more comprehensive, Mr. Hinton can imagine 30,000 or 40,000 people deciding every year that it's the only newspaper they need.

I see this as a last-man-standing play: if newspapers are dying, then second newspapers are the walking dead. Which means that the WSJ has no interest in ever being a second newspaper (to get business news which can't be obtained in a primary newspaper) or being a newspaper which forces the reader to buy another paper as well, just to round things out. It's a sensible strategy, even without any pre-existing animus towards the NYT.

But Hinton's explanation for why wsj.com didn't go free makes much less sense to me.

Why they dropped the idea of making wsj.com free:"It was hasty of us. You've got to understand that the value of what the Journal does at its heart is something that people are more than happy to pay for, because it powers their business, it powers their careers, it powers their jobs."

This isn't a reason why people should pay, it's a reason why (some) people can pay, and will pay.

I suspect the real reasons why wsj.com isn't free are rather different:

1. The site is already growing so fast that it's having difficulty selling out its inventory. If it got a lot more pageviews from going free, Hinton fears that the ad sales team wouldn't be able to sell the inventory without the kind of discounting which would severely dilute wsj.com's branding with advertisers.
2. Advertisers are behind the curve, and still value pay sites more than free sites.
3. Hinton fears that online financial-services advertising, which constitutes the overwhelming majority of ad sales on wsj.com, could be cut back severely if and as the current recession in financial services gets longer and more severe. Expanding your inventory at such a point in time is simply bad business.

These are temporary reasons, not permanent ones. Which is why I still think wsj.com will go free, if not in the immediate future.