Wall Street Journal: Online more profitable than Print

The New York Post is reporting that the Wall Street Journal earned more money with its online Web site than its print publication. Predictably, though, the Post spins it all wrong: instead of talking about the success of the online arm, it talks about the failure of the print side and about how WSJ publisher Peter Kann, could be “sweating over his job again”.
Rhetoric aside, the numbers are very interesting: The Wall Street Journal Online has 731,000 paid subscribers, up 5.2% from the previous quarter, at $84/year. Yes, that’s a $61.4 million annual revenue stream. (disclaimer: I am a paid WSJ subscriber too and would never think of switching to the print publication)

By contrast, the print publication costs $356/year for a subscription and is considerably less profitable: online has profit margins 20x that of the print publication.
From the perspective of synergy, Dow Jones (parent company of the Journal) also purchased popular site MarketWatch for a cool $538 million. Given that the Journal’s online efforts are proving profitable, look for these two to grow together and create a powerful, strongly branded online investment and business center staffed by some of the best writers and reporters in the business.
Which is just as well, because the Wall Street Journal print edition is seeing what every newspaper and publication is experiencing: it’s hard to sell print ads and subscriptions offline when there are free or almost-free alternatives online. It’s the future of newspapers, whether they’re ready to face it or not.
In addition to the Journal, all smart newspapers are trying experiments in this regards. My local papers The Denver Post and The Daily Camera, for example, are both pushing their online experiments: the Post is going to be introducing a personalized newspaper site that incorporates technology from my friends at NewsGator to allow subscribers to mix Post stories with other news and information sources (read ‘blogs’ here). The Camera? They keep trying to do something innovative online, but the paper goes through “online editors” faster than my kids go through socks.
The point, however, is like the tide rolling in, the old world of print newspapers is dying. The entire advertising model is crumbling because a smart online marketing campaign can net considerably better results than a print campaign for many, many businesses, and at significantly lower cost. (One big reason why I create the blog smart workshop series)
The online juggernaut has changed the world of recorded music, is forcing the film industry to rethink its own business model (and why aren’t studios responding with “let’s make the theater experience even more compelling?” instead of “let’s call our lawyers” anyway?), has caused most magazines to lose 1/3 of their pages in the last five years. It’s time for newspapers to face this too, to stop dabbling in the online world and recognize what the Wall Street Journal is clearly signaling: the future is in online news, not print news, and that it can be very profitable.

6 comments on “Wall Street Journal: Online more profitable than Print

  1. Dave:
    Free Newspapers online have learned to make money off of older stories – $3.95 per story or so. This might fly very well indeed. All newer stories are free – you can check your hometown newspapers even from the road and they can sell advertising there, sortof. Making them online subscriptions does not make any sense as you rightly pointed out. You can find the same stories elsewhere for free.
    Older stories become valuable also. $3.95 per story is a bit steep but most people would pay some thing like $0.99 per story very easily. Not bad for bits sitting there on your server. The archive business may be a profitable experiment with newspapers.

  2. What about us train commuters? Reading messages on the blueberry is annoying, and I would probably feel the same way about reading from a laptop.
    Some people (such as myself) would still rather read the WSJ on paper while jostling for position on an over-crowded train.
    The implications on the business model are debatable, but unless there’s a more viable alternative, paper will remain, though perhaps as a loss leader.

  3. Hi Dave,
    Interesting data.
    Another advantage to the online version is international reach and speed. If I lived in Japan, then getting the print edition would be both slower and more expensive.
    I wonder what % of the online market represents a possibly unintended international expansion.

  4. Some of those 700k+ subscribers should have protested the recent 50% rate increase. I am a long time subscriber. Now I find out that I have to have another subscription to view Barron’s content. Previously this was included.

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