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Murdoch And "Variable Pricing" Is The New "Free?"

Posted by: Jon Fine on January 24, 2008

A colleague and I had caught wind earlier this week that News Corp. would not make the Wall Street Journal online free, after all, and while we heard that the wind appeared to be blowing against the notion of a free, we couldn’t get anyone to confirm the chatter to our satisfaction. (This is my way of saying “we couldn’t nail the story before Rupert Murdoch broke the news at Davos,” although I now see the New York Observer had a pretty good bead on this a little while back.)

Ah well. Quick thoughts:

If Rupert is indeed outlining the strategy here, as per the Journal:

"We are going to greatly expand and improve the free part of the Wall Street Journal online, but there will still be a strong offering" for subscribers, Mr. Murdoch said. "The really special things will still be a subscription service, and, sorry to tell you, probably more expensive."

. . . well, then, this is sort of a best-of-both-worlds scenario, innit? “Greatly expanded” free stuff wins them more traffic and thus more online ad dollars; keeping the tariff in place also keeps subscription revenue in place. I'm not fully sure if I should read "variable pricing" into his remarks, but if so, well, so much the better.

But one other thing occurs to me. Let’s assume the gets a high CPM for its ad inventory on the pages locked up behind the firewall. This is entirely possible, because right now the ad sales side can make this argument to its advertisers: "Our readers are rich, rarefied, and uniquely engaged with the product, since they’re paying fairly serious dough to be there. And we mentioned they’re rich, right? This is a scarcity play, for both inventory and the kind of reader you can't get elsewhere. You wanna be here, you pay up.”

Why give that CPM premium up? Especially if you’re expecting to build out other parts of the site to give you more inventory on it elsewhere.

(In other words: Like Rupert, I’ve totally changed my mind on this!)

Reader Comments

John Furrier

January 24, 2008 8:13 PM

It's a burn the village strategy...loss leader content via blogs and high priced premium..there is a ton of commodity content but not enough good content. good content is the scarce resource. have to charge for it. Nice stategy. Very smart.


January 24, 2008 11:21 PM

find my blog at to learn why this is uninportantly significant to me...ha ha...
I've discovered that controlled content is a necessity among quality oriented journalism, does this describe the WSJ? Well, probably, let's see, does anyone pay for it? Are the likely willing to continue to?
I know, as a student at Indiana University (by taking one credit class per semester for the sum of @300.00usd I can get into the WSJ site and a whole host of other "free" I'm sure there's a deal in there somewhere where IU gives something to WSJ...right? Sure it does...c'mon...what do we want in life that is really free (and let's not even start with the economist's view of "free" right?).
We're going to need to keep paying top journalists to be top journalists, folks, sorry, it's just what it is...I know myself and other journalists would prefer to give you all everything we know, to do our job (take you where you can't go) without getting paid but...uh, my kids need new pants, and school books, and haircuts, and (don't need to go on, do I?).
I know...all the rhetorical don't even need to answer 'em, do ya? (yeah, another one...)


January 25, 2008 10:14 AM

There has to be a percentage of WSJ subscribers who will not renew their subscription once the material they wanted is made freely available.

As Big Daddy Kane suggested and Murdoch could well have listened, "No Half Stepping."

A free WSJ would have made a splash, even as a money loser. A not-so-free WSJ is just going to annoy people who want everything free.


January 25, 2008 10:19 PM

In follow up,
The need to explore the world and be involved in the societal structure that comprises the place humanity dwells, is of utmost importance for the survival of the quality of life we expect to continue to improve upon.
Therefore, withholding information that is necessary and justly in the domain of the public good, should be a crime against humanity.
It is something much more impeachable than having had "some sort" of relations with any such other individual...especially of the opposite sex...(this could be read as a reference to the impeachment proceedings against former Pres. Clinton).

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