|
This is an OurBlook interview with Gordon Crovitz, former publisher of the Wall Street Journal and a co-founder of the new Journalism Online venture.
 It seems almost crazy that newspapers would give away all their hard-earned material for free on their web sites, but that's exactly what they've done. What has been the impact of that decision on their financial viability and the future of papers in our society?
GC: For many years, I have been concerned that so many newspapers tried to charge for access to their brands and content in one medium ... print ... while giving it away in another medium, online. This had the unintended consequence of signaling to readers that the value was less online. Newspaper publishers hoped that online advertising would be enough to support their digital operations and indeed hoped that it would be the growth engine for the entire news franchise, print and online. Alas, online advertising only grew to the trees, not to the sky. Now, with online advertising in cyclical decline, news publishers of all kinds ... newspapers and magazines but also online-only news organizations ... see that it's hard to support a news department with only the advertising revenue stream. This is why so many news publishers are now working with Journalism Online to decide on the optimal mix of subscription and advertising revenues. In almost all cases, we're advising a hybrid model that permits news publishers to have all the advertising inventory they can sell while also generating significant subscription revenues, usually targeting the 10 percent most engaged monthly online unique visitors as the likeliest to pay to access the site.
You are known for establishing WSJ Online as a pay site, and it has grown to more than one million subscribers. What was your reasoning for this with the Journal, did you take much guff or opposition to it, and are you glad you did it?
GC: Over the years, there were times when people predicted that readers would never pay to access news online. By the time the Wall Street Journal Online crossed the one million paying subscriber mark, the critics quieted down. The profitability of online subscription revenue is very, very attractive. Remember that unlike with print subscriptions, which require buying more newsprint, adding press capacity and using trucks and trains to deliver the newspaper, in the case of digital products the incremental cost is almost $0, making the profitability high.
Do you have a favorite among the various pay methods being suggested ... subscription, micropayments or a premium content section of a site ... for the average metro paper?
GC: I think for most online readers of most news brands that a form of subscription, annual or monthly, will prove the most popular. People want full access to their favorite brands without being challenged continuously to make buying decisions. Micropayments for particular articles will likely play a role, but based on my experience will not be the lead model. That said, we're building every promising approach to e-commerce into the Journalism Online platform so that news publishers can pick and choose. Please tell us about Journalism Online ... what made you decide to join Steve Brill in this new venture, what's your timetable for it, what would you consider a success for it, etc. GC: The timing for Journalism Online seems ideal. News publishers know that they must find new revenue streams. It's now also clear that they can have their cake and eat it, too ... they can have all the advertising inventory they might need while also appealing to their 10 percent or more most engaged readers to become paying subscribers. Our e-commerce platform will launch in the fall. In the meantime, we are focused on signing up news publishers as affiliates.
(Editor's note: Journalism Online ... ... www.journalismonline.com ... is slated to become a national site in which newspaper, magazine and online publishers would place their content. Readers could buy annual or monthly subscriptions, day passes and single articles from multiple publications.)
Your inclusion of hotshot attorney David Boies and former Solicitor General Ted Olson among your advisers has led to speculation that you will target Google, Yahoo News and other aggregators for licensing payments to you. True? If so, why?
GC: We're delighted to have David Boies and Ted Olson as advisors. They are both dedicated to helping news publishers find new business models and of course are two of the most brilliant legal minds in the country. We believe that we will be able to reach better terms on behalf of our affiliates, such as with device makers. The Kindle, remarkably, gets by far the lion's share of revenues for access to news brands ... and won't even share the subscriber information with the publishers. We'll change this mismatch.
As publisher of the WSJ, Mr. Crovitz turned its financial performance around to become strongly profitable after earlier losing money. Also in his Dow Jones career he was corporate VP for planning and strategy, editor and publisher of the Far Eastern Economic Review in Hong Kong and founding editorial page editor of the Wall Street Journal Europe in Brussels. He is a graduate of the University of Chicago and holds law degrees from Oxford University, where he was a Rhodes Scholar, and Yale.
|
