Monday, March 9, 2009

Why the Wall Street Journal doesn't count

Whenever people start saying newspapers should make readers pay for content, they point to the Wall Street Journal. "See," they say, "those of you who argue that readers will never pay for content are wrong. The Wall Street Journal charges, and people pay. Ergo, if newspapers charged readers, readers would pay."

Problem is, they're wrong.

It's not an apples to apples comparison. The WSJ and your average hometown newspaper are not the same thing. The customer base is not the same. The perceived value in the product is not the same. The motivations for purchasing are different.

People buy the WSJ because they view it as an indispensible tool for making money. It's a core part of their business. Indeed, many WSJ subscriptions are paid for not by their readers but by companies who buy them for their employees. Readers are willing to shell out $104/year* because they expect it will help them make far more than that, via business dealings or career advancement. In their minds, the WSJ is comparable to their Blackberrys, or aircards, or business class seats. It's a critical tool for the effective operation of their businesses or career. In that sense, not only is $104 a completely reasonable price. It's so cheap most subscribers probably don't even think twice about it.

That's totally different from how the average newspaper reader (online or offline) views a newspaper. People read newspapers for a whole range of reasons, but just about none of them do it because they view their hometown newspaper as an indispensible business tool.

The WSJ and your hometown newspaper are two different products. You can't use the success of one's business model as proof that business model will work for the other. That's like saying "Airplanes and cars are both modes of transportation, so let's consider using an airplane manufacturer's business model and pricing strategies for cars."

I don't have a final opinion on whether readers will pay for newspaper content. But I do know that the argument "Readers pay for the WSJ so they'll pay for the hometown newspaper" holds no water.

* for online-only. Or $156 for print only. Or $182 for both.

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