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Dorian Benkoil senior consultant at Teeming Media. An award-winning journalist and editor, he was a foreign correspondent for AP and Newsweek, and international and managing editor for At ABC News he moved to the business side, handling sales integration and business development, before joining Fairchild Publications as General Manager for their Internet division, becoming editorial director for, then a consultant for Teeming Media in New York. He graduates this year with an MBA from Baruch's Zicklin school of business. Learn more about him at or his blog -

Robert Cauthorn is a journalist, former vice president of digital media at the San Francisco Chronicle, and was the third recipient of the Newspaper Association of America's prestigious Digital Pioneer Award. He launched one of the first five newspapers web sites in the world and is generally considered to have delivered the first profitable newspaper web site in 1995. Cauthorn has been in the middle of the transition from old media to new and is recognized as frank-talking critic when he believes newspapers stray for their mission. In mid-2004 he became the president of CityTools, LLC a new media startup based in San Francisco.

Ben Compaine has divided his career between the academic world and private business. He was a journalist when manual typewriters were considered state of the art, but also led the conversion of his college newspaper to cold type. He has started and managed weekly newspapers. His dissertation at Temple University in 1977 was about the changing technologies that were going to unsettle the landscape of the staid and low profit newspaper industry. Since then he has focused his research and consulting on examining the forces and trends at work in the information industries. Among his most well-known works (and the name of his blog) is "Who Owns the Media?".

Vin Crosbie has been called "the Practical Futurist" by Folio, the trade journal of the American magazine industry. Editor & Publisher magazine, the trade journal of the American newspaper industry, devoted the Overview chapter of executive research report Digital Delivery of News: A How-to Guide for Publishers to his work. His speech to the National Association of Broadcasters annual conference was one of 24 orations selected by a team of speech professors for publication in the reference book Representative American Speeches 2004-2005. He has keynoted the Seybold Publishing Strategies conference in 2000; co-chaired and co-moderated last year's annual Beyond the Printed Word the digital publishing conference in Vienna; and regularly speaks at most major online news media conferences. He is currently in residence as adjunct professor of visual and interactive communications and senior consultant on executive education in new media at Syracuse University's S.I. Newhouse School of Public Communications, and meanwhile is managing partner of the media consulting firm of Digital Deliverance LLC in Greenwich, Connecticut.
About this blog
Two forces have shattered the news media. Technology is the first. Although media technology is undergoing its greatest change since the day in 1440 when Johannes Gutenberg first inked type, for more than ten years now the news industry has mistaken new technologies merely as electronic ways to distribute otherwise printed or analog products. Estrangement is the second. The news media has lost touch with people's needs and interests during the past 30 years, as demonstrated by rapidly declining readerships of newspapers and audiences of broadcast news. How we rebuild news media appropriate to the 21st Century from the growing rubble of this industry is the subject of this group weblog.
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August 1, 2007

If the Wall Street Journal Were Free

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Posted by Dorian Benkoil

NOTE An update to this post is here.

= = = = = = = = = = = = = = = =

In the last paragraph of one of the many stories in today's Wall Street Journal about the purchase of parent Dow Jones, Rupert Murdoch is quoted as saying if the paper went completely free it would be a "wash" financially. It would certainly be a huge step to go free (and one I'd be perfectly happy with, paying as I now do.) Let's explore whether Murdoch's assertion is really likely to be true.

First a few assumptions:

- The soon-to-be 1 million paid subscribers referred to in another piece in WSJ are paying full price, $79. - There are seven million unique visitors and 90 million monthly pageviews, as WSJ claims. (That's almost 13 pageviews per unique.) - The two display ads per page (large rectangle, narrow skyscraper) run at an average CPMs of $35 and $20 (reasonably possible rates for a targeted, subscription audience in a financial/business publication). The performance based ads at the bottom are together worth an effective CPM of $12. (I know that may be high, but there are a lot of them, and it's the Journal.) - 80% sellout on average in all ad spots (some spots will be without paid ads in some instances, there has to be some room for ad serving and so on). - Each pageview is equally valuable.

So, we've got, yearly:

- 1 million subscribers * $79 = $79 million from subscription

- 90,000,000/1000*.8 * (35 + 20 + 12) = $4.8 million monthly in advertising * 12 = $58 million in ads

Grand total: $137 million revenue from subscription and ads.

Murdoch predicts in the piece that a free site would have 10 times as many visitors and five times as much advertising. But the number of pageviews per unique would drop significantly, because a lot of the traffic – especially new traffic – would be inbound single hits or quick dips from blogs, search engines and so on. The ad rates would also drop because advertisers could not be convinced they were buying as exclusive a subscription audience. Let's take Murdoch's assertions as true and assume:

- Pageviews per unique will drop to a more normal news industry standard of 4 per unique. (We'll also assume that by "visitors" Murdoch means "uniques".) - Ad rates will drop to 60% of their previous levels - A lower level of sellout on pages (as Murdoch acknowledges in saying ads won't go up as much as visitors will).

So we have:

- 70 million unique visitors at 4 pageviews per = 280 million pageviews per month. - Five times as many ads and 60 percent sellout.

Which in my estimation comes out to a total of about $67.5 million.

At 80 percent sellout it's $90 million. Even at the same number of advertisers, that's still only $108 million.

Now, maybe to Murdoch the difference between $137 million and $108 million is so small as to be pocket change and therefore "a wash." Or maybe my assumptions or math are way off (if you want a spreadsheet with my calculations, just ask and I'll send it.) But that's still a lot of newsroom jobs for that extra $29 million, or more under the poorer ad scenario

Plus, subscriptions are pre-revenue, cash collected up front that can then be spent over time. They're great for cashflow and provide a "float." Ads on the other hand are typically paid months after they're billed, and can be a real problem for cashflow. Subscriptions also tend to be more stable in down times than advertising, which can be canceled with little notice. Subscriptions are a more stable business and take less overhead to maintain.

I don't see that making a successful subscription product like the Journal free makes economic sense. Tell me what's wrong with my thinking.

Comments (11) + TrackBacks (0) | Category: Newspapers


1. tony on August 1, 2007 5:08 PM writes...

Your calculation is essentially saying that by increasing user base by 10x, WSJ loses ad money?
$58MM vs $40.5MM.

70MM monthly unique visitors is probably not realistic. That would put them in the top 10 for most visitors on the internet. While visitors won't grow by 10x, i'm pretty sure page views will grow by almost that much. 13 PV a month. I bet the 1 million that have access generate much more traffic than the 6MM that don't.

8pv a month for 6 million no access
42pv a month for 1 million with access

8*(6,000,000) + 1*(42,000,000) = 90MM PV a month

I think WSJ has the potential to become the ESPN of finance if they indeed brand the fox business network WSJ some day.

While the finance audience may not be as large as sports, they probably have the spending power to make up for it, hence higher cpm.

12 months from now, lets assume 25MM monthly uniques, each with 24 page views a month since they have access to all content (may be high, but it is less than one page view per day). That is 600MM page views a month on average (seems high, but this is less than espn and nytimes). Assume a $33 combined cpm, with 60% sell out we are looking at $142MM annual revenue. Throw in online video and mobile ads and we can be well over $150MM.

not sure if my estimates are any better than yours, but they should at least provide another perspective

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2. Dorian on August 1, 2007 6:08 PM writes...


Thanks. Good analysis. You made me go and correct my math ... it would be $58 million in the lower estimate, not $40 as I'd asserted. I'm fixing now. Your estimates look plausible, as well, though I'm skeptical there would be that many PVs per unique.

Also, I left out video, because that's already available. Not sure about mobile, but today that's a small piece -- will grow, though, you're right.


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3. Dorian on August 1, 2007 6:11 PM writes...

D'oh. I mean $67.5 million.

While I'm here, I'll also point out, though, that ad revenue is less attractive for the reasons I state than subscription. But if WSJ can find all those opportunities and reach the numbers you site, maybe it works.

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4. tony on August 1, 2007 8:22 PM writes...

agree on the overhead point. I'm sure rupert was talking profit, not revenue when he stated they would be a "wash."

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5. Dorian on August 2, 2007 1:42 PM writes...

And today I see on Paid Content that Gordon Crovitz of WSJ says they plan to continue a mixed model....

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6. nick on August 7, 2007 10:28 PM writes...

The interesting extra question: what happens to the combined print+online dollars?

By detaching the sub, it is highly likely that the print subs will fall. Or that print circ revenue will fall through reduced pricing. Or that total print circ will fall, driving ad yields down.

At that point Rupert will need to decide whether to maintain the print costs.

If he had to go to web only, he would have to recover all of the WSJ costs in online. And they are likely to be at least $800m (excluding likely redundancies and plant closures etc).

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7. essistme on September 19, 2007 1:43 PM writes...

Here's a reality check for your math:

>> Most people aren't paying $79/year as you describe, or even the $99/year that is offered online in some places for subscriptions.

>> Print subscribers can get it for $49 as post-sale add-on.

>> Dow Jones is HEAVILY discounting their online subscription in their promotions. i.e. You can get **BOTH** the PRINT and ONLINE subscriptions combined for $125 for 1 year. (details: PLUS, they'll throw in an additional 2 months free (14 months for $125 = $0.30/day for BOTH online + print versions). How do you come up with a subscription value for the online component for this deal? The hard copy subscription should be more than $125 to begin with (in fact, it's only $99/year right now with bonus weeks too) -- It used to be $215 or higher at one point for the hard copy subscription alone.

And there are other ways to get to the content behind the paid login gate as well:

So in the end, the current subscription revenue booked against the online division isn't near what you're calculating. Given that, the math points more in favor of setting everything free, no?

Permalink to Comment

8. Dorian on September 19, 2007 2:27 PM writes...


You make a decent point ... and my later post, linked from the top, concedes that ads are probably the way to go over time. Also sites like yours that give the Journal links for free -- quasi-legal and actionable though they may be -- are something the Journal may be tired of fighting. Congoo, where I contribute and have a relationship, has been working with the Journal to give a number of stories to users under legal license for free.

Permalink to Comment

9. lavender on October 17, 2007 9:44 PM writes...

could you give me your spreadsheet of your calculations?
I'm doing a project with it...
I can't find the number though...
i wanna know how you calculate these numbers by your consumptions?

Permalink to Comment

10. lavender on October 17, 2007 9:45 PM writes...

could you give me your spreadsheet of your calculations?
I'm doing a project with it...
I can't find the number though...
i wanna know how you calculate these numbers by your consumptions?

Permalink to Comment

11. Idetrorce on December 15, 2007 7:19 AM writes...

very interesting, but I don't agree with you

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