There are some basic patterns that seem to repeat themselves through the publishing industry, one of them being the relative attractiveness of subscriptions in a down economy and the relative attractiveness of ad-supported publishing in an up economy. With the global economic cycle already beginning to cut into online advertising money and that money spread across more high-quality online inventory than ever, it's not really a surprise that there's some reaffirmation of subscription models at Dow Jones. As noted in The Wall Street Journal, News Corp Chairman Rupert Murdoch underscored in comments at the Davos World Economic Forum that Dow Jones would be continuing a subscription component to the WSJ's online offering, even as it expands its free offering to a far broader online audience.
Dow Jones has little to lose and quite a bit to gain by trying this "guns and butter" approach to online monetization. With about two million affluents and influential online subscribers, WSJ offers strong demographics to advertisers who would otherwise be left to compare only WSJ's open Web assets with other quality online content. WSJ will hold its own with those competitive products, to be sure, but why toss out higher ad rates if you don't have to? By expanding both search engine exposure to much of WSJ's online content and continuing to build an online club for elites there's reason to think that the Journal is headed towards a comparatively robust year of growth.
The main question is, what will keep the subscribers coming back for more? We've mentioned in earlier posts that the subscription component could be used to leverage WSJ's upscale demographics in any number of social media-oriented efforts, as well as to offer financial analysis tools that would one-up offerings made available by Yahoo! Finance as well as premium offerings from Morningstar and other online suppliers. Whatever the changes they need to be oriented more towards a younger generation's needs if they are to use subscription revenues for anything more than the temporary bulwark that the TimesSelect premium experiment turned out to be.
Any way you look at it it's not clear that there's a core of traditional editorial content from any news publisher that's likely to sustain growth in online subscriptions in the long run. The tricky job that Dow Jones has on its hands is to project the value of its brand more globally via ad-only content whilst maintaining some sense of value in its exclusive subscription product. Dow Jones has much to gain in retaining its subscription model as it expands ad-only content, but they will be challenged to keep the value of the Wall Street Journal brand high unless there are new styles of content that can build on the existing brand's loyalty.