The plight affecting newspapers is not affecting all newspapers, at least not to the same extent. In anything written about the demise of paid newspaper content online, the Wall Street Journal and Financial Times have to be awkwardly inserted as the exception to the rule. At a time when responses to the current ‘crisis’ in the newspaper business continue to include charging for content, it’s important to try to understand why customers pay for WSJ and FT content online.
These two papers are clearly different from the rest but I don’t think it’s for the reasons that are most talked about, at least not any one in isolation. The ability of these organizations to charge readers for some or all of their content online has been attributed to several things including that they specialize in finance, that their content is just that good, and that they’re charged to corporate accounts.
These things are all true, but I’m not sure any of them are solely responsible for customers willingness to pay for online subscriptions. If business people could find what they were looking for elsewhere online, I’m pretty sure companies would quickly cut online subscriptions to the WSJ and FT, especially in the current economic environment.
As for specializing in finance as a niche, the WSJ and FT are still essentially reporting business- and finance-related news facts and they can’t own them anymore than other organizations can own any other type of news facts. There is still no scarcity in what the WSJ and FT are reporting, so in this sense they should be no more exempt from current trends than other major news organizations.
The WSJ and the FT are the sources of record for the financial industry and the fact they are the best at what they do is important and necessary to compete for paying customers. However, it’s not enough to explain why customers are willing pay for content in the first place when they aren’t willing to pay for other news content. Attributing the difference to the quality of content alone assumes a linear relationship between demand and price all the way to zero and that idea was debunked a while ago.
Rejecting these arguments leads to the notion that readers of the WSJ and the FT obviously can’t get what they need elsewhere – they seem to need the specific content provided by these two papers and are willing to pay for it, regardless of the medium. So, what is different?
The real difference with both the WSJ and the FT is that they write about their customers – companies, executives, banks and bankers, the industries in which they work – and the financial industry itself. Over time, a community of sorts has formed around the content produced by these papers and it makes the medium irrelevant. It’s not something we recognize as a community now because it was built in a traditional, offline, pre-Web era of scarce information.
In a professional capacity, readers of the WSJ and FT need to know what their clients are reading, what their prospects are reading and what their boss is reading down to the last word. Company executives need to know what is being written about them and how what they’ve said is being reported and interpreted, and the same goes for their clients and their competitors. They can’t afford to miss a single snippet of information by getting their news elsewhere because they talk to each other using these sources as a definitive record.
Yes, they both have a strong brand, but long-term brands don’t mean anything if they’re not delivering what their customers want. They certainly don’t stand-up to the kind of fundamental change in market structures caused by the Web in this instance. The first wave of innovation on the Web showed that companies needed to start from scratch when taking their brands online.
None of this guarantees the readers of the WSJ or the FT will always be willing to pay for online content. The fact that their communities were built in offline environments doesn’t make them immune to the changes taking place online in the long-term. Nor does it mean it will always be in the best interests of the WSJ or the FT to charge for some or all of their content.
What it does mean is that the solution for other news organizations lies in serving readers and building communities, rather than starting with what they need and working backwards until they’re forcing business models onto readers. The bad news is that building new communities now means playing by the new rules created by abundant information, and that includes providing most content for free to ensure everyone can see it and share it.
Posted on March 10, 2009
My name is Phillip Baker and this is my personal blog about finding value in a world of free information.