Why isn’t The Wall Street Journal free on-line?

by on March 5, 2007 at 5:55 am in Economics | Permalink

Steve Levitt wonders.  My view: in a given WSJ issue, there will be a small number of wonderful bits, and a whole lot most people don’t care about, like the notices of the debentures.  A free web site would make it too easy to cherry-pick the interesting content, strip it down, and reproduce it and circulate it without the ads.  Even if WSJ could enforce a price on the unbundled content, bundling can facilitate price discrimination, especially when the diversity of valuations of bits is high.

The FT, which also has a gated web site, is similar; their best article on a given day is wonderful, but I don’t read most of what they offer.  Many mornings I won’t even open up the second section, who cares about European debentures? 

When your newspaper is more like a "thicket," the best packaged version of that paper is the paper’s website itself and useful unbundling is difficult.  Note that the so-called chaff business notices in the WSJ are in fact intensely interesting to the few people they immediately affect.  That makes it possible to charge for such news, even though it doesn’t contribute to producing a thicket of content for most readers.  We return to the potential dangers of unbundling, and the possibility of picking apart the WSJ until it isn’t a newspaper any more.  An upfront charge makes sure the value is reaped before most of the paper is discarded.

Xmas March 5, 2007 at 8:29 am

The WSJ does run opinionjournal.com, which offers editorials and some interesting articles for free though. It’s the mirror opposite of the New York Times model. Which kinda tells you something, doesn’t it.

Peter March 5, 2007 at 9:14 am

Let’s not forget one important thing. The WSJ charges for online access for the same reason that dogs lick their, y’know, themselves -
because they can. If enough people weren’t willing to pay for WSJ online access the current model wouldn’t work.

Matt March 5, 2007 at 9:23 am

Of course the WSJ has to give away the opinions in the “opnionjournal” since no one in their right mind would pay for _that_! There is valuable reporting in the real newspaper and garbage of the first order in the opinion section.

Rob March 5, 2007 at 10:23 am

Also, I found interesting is that my access to LexusNexus through my university and work, there is no option to search WSJ. If Im wrong let me know, but I’m pretty sure about this one.

knackeredhack March 5, 2007 at 12:07 pm

I think it is mistaken to think that the news coverage of the WSJ is not easily substituted.

Newspapers were traditionally content aggregators with differing degrees of specialisation or political bias, before electronic dissemination and a data rich environment.

The driver of today’s real-time attention is xml, which is external to the newspaper industry. Newsreader technology atomises the reader’s attention and diminishes the newspaper brand, and lets in you guys, for example. This was evident within dealing rooms through the 1990s where newswire feeds were first aggregated and sources of news proliferated. Dealers often stopped noticing who was the source of the news they were reacting to, much to the disappointment of journalists.

Those same aggregators were aggregating lots of other information for dealers, creating analytical opportunities that reduced the value of breaking news as a source of market volatility. Those firms now are the ones pushing xml across industry, creating new rich sources of analytical data for executives to scrutinise in non-financial firms. I suspect this reduces the pay-off of spending time on what the WSJ is reporting. In relative terms, the executive is more sophisticated and the newspaper less so.

Meanwhile, a combination of select blogs and specialist trade journals is likely to cover more relevant ground for the decision-maker than the WSJ. However, carrying a copy of the WSJ still signals something to others, if that is what you want to signal. Just make sure you don’t smile while you do it,or the game’s up ;-)

dj superflat March 5, 2007 at 3:03 pm

i’m not outraged, the journal is one of the few things i have no doubt is worth my money. it’s not just that i need to read it for my business/work, it’s that the journal does some things so well, i have to buy it. the nytimes sunday magazine is similar. by contrast, there’s never anything in USA today that i need, even if i’m willing to read it when given a free copy by a hotel.

Martin March 6, 2007 at 9:52 pm

I agree with JP, the WSJ cannot be substituted, every morning as part of my work routine when I get into the office and the first websites I hit are the WSJ, CNN Money, NY Times and the Register. From my experience as a heavy WSJ reader for the past four years, is that most of the time WSJ scoops stories- often 6-24 hours before competing news sites are on it. The only comparable news source for portfolio company information is the Register and Inquirer which break a story a good 1-2 months before it surfaces albeit with a 60-70% accuracy rate, with a good 30% turning out to be nothing but speculation. In fact most of the people I know that are WSJ subscribers would pay up 50% or more for the subscription – but I do note that I am probably not looking at a representative sample.

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