The New York Times, The Wall Street Journal, and the Financial Times Prove That If You Have a Niche News Product It Can Be Sold for Good Profit On the Internet

Philip M. Stone January 29, 2006

When the New York Times announced last year it would start charging non-subscribers to the print edition to read its best columnists online most people thought the plan would fall flat on its face. Well, it hasn’t!

When the Wall Street Journal a few years back made its web presence via subscription, everyone thought that was a born loser. It wasn’t and last year wsj.com increased its online subscriptions by 8%. 

Taking a page from that same book, the ailing Barrons financial weekly has withdrawn its material from wsj.com and made it available just on its own subscriber web site, and it’s off to a pretty good start, too.

And the Financial Times, which has seen terrible losses for its print edition since 2002 – it should make breakeven when 2005 figures are announced in February – enjoys about 80,000 paid subscriptions to Ft.com that has been profitable since 2002.

So the message seems to be if you have niche, exclusive news or opinion it can be sold on the Internet. But the web is fickle. The Los Angeles Times tried to sell its Calendar section on the web, but that didn’t work out. It’s a matter of finding that right niche material.

The New York Times saw from its web statistics that a major draw to the site was its columnists, and they also saw those columns were being emailed frequently. So the Times came up TimesSelect that decreed if one was not a subscriber to the print edition then in order to access the columnists on the web it would cost $49.95 a year. And most media pundits thought the Times would fall flat on its face.

But just four months into the project the Times says it has some 156,000 subscribers paying the $49.95 – that works out to about $7.8 million annually. Of course, on total company sales of $931 million in Q4, the annual $7.8 million is but a spit in the ocean, but still not bad for something one had been giving away!

The service actually has 390,000 subscribers but some 234,000 of those are also subscribers to theprint edition,so they get the web access for free. In its next marketing move, The Times is offering students and professors half-price subscriptions to the web service

At the Wall Street Journal where the print edition has suffered from soft advertising in financial and technology sectors, higher newsprint costs, and the costs of launching the Saturday edition, the web site keeps rolling right along, now with 768,000 paid subscribers, a 7.9% increase for the year. Subscribers to the print edition pay $39 a year and non-print subscribers pay $79. That probably works out at around $40 million annually, around 8% of total company revenues.

But Barrons, the austere financial print weekly, had a poor 2005 – in the fourth quarter alone advertising was down 10.2%. To claw back revenue for the brand, Dow Jones has taken the Barrons material off the wsj.com site and it is only available via a subscription to the Barrons site at $79 for non print subscribers and $39 for print subscribers. The company claims that by late January it has some 45,000 subscribers and it has announced a couple of free days for sampling.

But a look at various blog sites shows there is some discomfort by some wsj.com subscribers on the way Dow Jones just arbitrarily removed the Barrons material from wsj.com. The subscription contract actually allows Dow Jones to alter the service any way it wants, but there is particular annoyance from those who claim they had bought a joint WSJ and Barrons online subscription for $99 in previous years that have renewed and which Dow Jones now allegedly refuses to honor (but apparently if you phone and complain you can reach some accommodation – one person said he got a free print subscription to Barrons for a year worth $149 so he didn’t mind giving up the $20!)

And at the Financial Times, readership of the UK edition is said to have taken a dive of some 30% last year, circulation is down, and advertising is soft but better than the past couple of years. The FT has hinted it will announce the paper broke even in 2005 following losses since 2002, but the FT subscription web site has been in profit since 2002, and is now said to total about 80,000 subscriptions – not that far away from the circulation of the UK edition alone.

 

 

NYT columnist Maureen Dowd - $49.95 a month

The New York Times and Dow Jones spent around $1 billion between them last year buying advertising-supported web sites to boost their digital earnings, and those buys are beginning already to show some real return. About.com cost the Times $410 million, but last year the Times earned some $44 million from the site; something its chief financial officer calls a “huge payoff”.  But for all that the company’s digital properties account for only about 6% of total revenues.

Dow Jones paid $519 million for MarketWatch, and although it is credited with increasing overall company revenues last quarter officials say it has yet to pay off as handsomely as hoped because of integration problems, consolidation between online brokerage houses that advertise on the site, and the loss of ad executives. But even so electronic publishing increased its overall revenues by 33% to $134 million in the quarter – about 28% of the company’s total, and there is no doubt this is the major growth area.

So, there is no law that says news has to be for free on the web. As those subscription sites to the newspaper’s own web presence proves, it’s just that information needs to be specialized or opinionated to the extent that same information cannot be found elsewhere.

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