The Media They Are A-Changin'

Despite looking like Rupert Murdoch's takeover of the Wall Street Journal was resisted by some high-mindedness of the Bancrofts' preoccupation with editorial integrity at WSJ, green-light for the deal has come as Murdoch agreed to pay an extra $40M in fees for the Family's i-bankers and attorneys. I'm sure we'll learn more about this inter-family affair so let's think for a while what this may mean for the print media landscape.

Background: The US print media alone are a $15B/year business whose overwhelming reliance on advertising has been under attack from:
  • the internet as an alternative source for news and commentary;
  • the internet as support for a better advertising model;
  • the alienation of their readers.
Despite trying consolidation and other "financially-rational" business tools, there was little, if not worse, that the print media could do about the above three developments. In the newspaper business, the last two standing had been The New York Times, and The Wall Street Journal, until the Bancrofts gave in; Now it's just NYTimes--still resisting Morgan Stanley calls for reorganization and such.

The Murdoch Factor: Rupert Murdoch could be described as the ultimate newspaper man--in addition to being one of the sharpest businessmen in media and media-men in business. Built patiently over decades, by sometimes ignoring the calls from the financial community, his media empire is best positioned to capitalize, on a global scale, on the synergies at the convergence of all media--the internet, satellite, print, etc. Murdoch may well shape the next media business model for he's got the most pieces of this puzzle. In a sense, media will likely become more democratic--easier to access, lower price, wider distribution.

Likely Re-actions: was among the select few internet media properties still charging for access. In case Murdoch decides to make money at the convergence of media and lowers to price, expect FREE online versions of your favorite publications. Foreign Affairs, Atlantic Monthly, NYRB, or Harper's will likely be a cost-free click away from you. Consequently, at least part of the $15Bn will be re-routed via the internet. Online publications will be wide-open to readers-input, through blogs and other MySpace emulating mechanisms. An early taste of the audience-generated opinion and commentary one only has to enter the newly added blog section of NYTimes. The audience generated content at NYTimes tops most contributions of The Times' own staff's through richness of perspectives and intelligence. The online versions of the newspapers will take a life on their own, becoming the loci for extended and virtual town-halls. Unlike their print versions, the content will be rich and continuously re-freshed. You think some about the rest and let us know by way of COMMENTS.

For a view into the failed mechanics of news-media, take a look at Goodbye to Newspapers?


fCh said...

September 18, 2007
Times to Stop Charging for Parts of Its Web Site

The New York Times will stop charging for access to parts of its Web site, effective at midnight tonight.

The move comes 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. TimesSelect has been free to print subscribers to The Times and to some students and educators.

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

The Times said the project had met expectations, drawing 227,000 paying subscribers — out of 787,000 over all — and generating about $10 million a year in revenue.

“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site,

What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to 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.

“What wasn’t anticipated was the explosion in how much of our traffic would be generated by Google, by Yahoo and some others,” Ms. Schiller said.

The Times’s site has about 13 million unique visitors each month, according to Nielsen/NetRatings, far more than any other newspaper site. Ms. Schiller would not say how much increased Web traffic the paper expects by eliminating the charges, or how much additional ad revenue the move was expected to generate.

Those who have paid in advance for access to TimesSelect will be reimbursed on a prorated basis.

Colby Atwood, president of Borrell Associates, a media research firm, 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.

“The business model for advertising revenue, versus subscriber revenue, is so much more attractive,” he said. “The hybrid model has some potential, but in the long run, the advertising side will dominate.”

In addition, he said, The Times has been especially effective at using information it collects about its online readers to aim ads specifically to them, increasing their value to advertisers.

Many readers lamented their loss of access to the work of the 23 news and opinion columnists of The Times — as did some of the columnists themselves. Some of those writers have such ardent followings that even with access restricted, their work often appeared on the lists of the most e-mailed articles.

Experts say that opinion columns are unlikely to generate much ad revenue, but that they can drive a lot of reader traffic to other, more lucrative parts of The Times site, like topic pages devoted to health and technology.

The Wall Street Journal, published by Dow Jones & Company, is the only major newspaper in the country to charge for access to most of its Web site, which it began doing in 1996. The Journal has nearly one million paying online readers, generating about $65 million in revenue.

Dow Jones and the company that is about to take it over, the News Corporation, are discussing whether to continue that practice, according to people briefed on those talks. Rupert Murdoch, the News Corporation chairman, has talked of the possibility of making access to The Journal free online.

The Financial Times charges for access to selected material online, much as The New York Times has.

The Los Angeles Times tried that model in 2005, charging for access to its arts section, but quickly dropped it after experiencing a sharp decline in Web traffic.

fCh said...

October 1, 2007
Financial Times Will Allow More Free Access to Web Site

LONDON, Oct. 1 — The Financial Times, preparing for a fierce battle with The Wall Street Journal over business readers and online advertising revenue, will give casual readers free access to its Web site this month, according to executives at The Financial Times.

The Web site of the London-based business newspaper, which currently charges for much of its content online, as of mid-October will allow users to get up to 30 articles a month for free, said John Ridding, chief executive of the newspaper. Anyone who wants to view more online material will have to subscribe to the site.

The shift, part of what Mr. Ridding described as a broad overhaul of FT.comthat will be phased in over several months, comes as other newspapers are rethinking their efforts to charge users for online content. A surge in online ad spending over the last three years has persuaded many publishers that it is better to increase their Internet audience, in an effort to appeal to advertisers, than to try to squeeze meager revenue from online subscriptions.

The New York Times this month dropped a two-year-old program under which users had to pay for access to the work of New York Times columnists and its archives. The Wall Street Journal, which charges readers for most of its online content, is also considering opening its site to all Web users, according to statements by Rupert Murdoch, the chief executive of the News Corporation, which has agreed to buy The Journal’s owner, Dow Jones.

Ien Cheng, publisher of, said the paper had decided against a completely free Web site because it felt that loyal readers, many of whom work in the financial markets or hold high-paying management jobs, would be willing to pay for regular access. Meanwhile, by removing the restrictions for less frequent users, the site can benefit from increased inbound links from blogs, search engines and other drivers of Internet traffic, he said.

“To get caught between all this ‘free’ or ‘paid’ is too simplistic,” Mr. Cheng said. “We see this as a third way.”

The Financial Times, which started selling subscriptions to its Web site in 2002 and also publishes a Chinese version that is called, was already working on the revamp when News Corporation made its $5 billion bid for Dow Jones, Ridding said. Mr. Murdoch has said he would invest in The Wall Street Journal’s Web site and international editions, potentially heating up the battle for business readers.

The Wall Street Journal has nearly 1 million paying customers of its Web site, far more than any other newspaper Web site. The New York Times had 227,000 paid viewers of TimesSelect, its subscription program, which it recently discontinued. The Financial Times, which is owned by the London-based media company Pearson, has 101,000 Web subscribers.

By restricting Web users, sites that charge for access may be undermining their ability to sell advertising, analysts have said. Online advertising, virtually nonexistent when The Wall Street Journal’s subscription model was set up in 1996, has soared in recent years.

Douglas Anmuth, an analyst at Lehman Brothers, has estimated that wsj.comwill draw $75 million in ad revenue this year, along with $65 million from subscriptions. But with a larger Web audience, nytimes.comwill bring in more in ad revenue alone, an estimated $175 million, he forecast in a recent note to investors.

Mr. Murdoch has indicated that dropping the subscription fee, in an effort to attract more advertising, might be one of the first things News Corporation executives do upon completion of the Dow Jones acquisition, which is expected this year.

The revamped subscription model for is part of a broader overhaul of the Web site that will include a visual makeover next year, Mr. Ridding and Mr. Cheng said. In the meantime, there will be other enhancements, including additional blogs and more video interviews with corporate chief executives, they said.

Mr. Cheng said ad revenue at was up about 40 percent in recent months, compared with a year earlier. Unique visitors, a standard measure of Web traffic, are up about 70 percent year on year, to about 6.5 million unique users a month, he said. The site gets about 30 percent of its audience from Britain, 40 percent from the United States and 30 percent from Europe and Asia.

The Financial Times charges $110 in the United States and 120 euros in much of Europe for a one-year Web-only subscription. Ridding said prices would remain the same, even as the subscription model shifts. An online-only Wall Street Journal subscription is $79.

Mr. Ridding said the higher price is consistent with The Financial Times’s strategy of trying to appeal to high-end readers rather than a mass-market consumer audience. The Financial Times recently raised the price of its print edition, but still managed to post an increase in circulation, to about 427,000 copies worldwide, in August.

Most of its copies are sold in continental Europe, with some in Asia and the United States. Before revamping the subscription policy for the Web site, Mr. Cheng said, studied readers’ usage patterns. Many users came to the site only infrequently, while others returned many times a day.

Under the new system, once users click on five stories in a 30-day period, they will be asked to register with the site. Then, when they hit 30 articles, the site will ask them to subscribe. If they decline, their access will be restricted to the home pages, until the 30-day period ends.