It is the envy of the dotcom world. WSJ.com, the Wall Street Journal's Internet site, has been charging subscriptions to users since it was launched in 1996. And, while almost all its rivals quickly abandoned their attempts to do the same, WSJ.com is actually planning to charge its 600,000 or so customers more.
"It seemed to us fundamentally illogical to charge a substantial amount of money to print customers [each copy costs US$1] but to provide all that plus more in a different medium and assume it should be free," said Peter Kann, chairman, chief executive and publisher of the Wall Street Journal.
No doubt many of its rivals originally shared the same philosophy, but they have been forced to change their minds. The Financial Times' Web site, ft.com, initially intended to charge subscriptions. In fact, it quickly dropped charges for searches -- despite the fact that users can search through rival papers as well as the FT on the site -- and now rules out ever charging for the basic service.
Likewise thestreet.com has abandoned subscriptions for its US service, although it closed its British site within months of launch and does charge for realmoney.com, aimed at active investors.
The Guardian and Observer have 150 staff producing dedicated content for guardianunlimit-ed.co.uk, all currently free. Users of hemscott.net, a financial Web site, initially had to either subscribe or use Hemscott as their internet service provider -- netting it telephone revenues.
Now, almost everything from comment on results to a full archive of stock-exchange announcements is, free although like thestreet.com, it does charge for premium services for active investors.
So how has the WSJ succeeded where others have failed? One reason may be that it is relatively cheap: subscriptions cost just US$59 a year, or US$29 if you already subscribe to the print edition. Contrast that with the US$850 a year asked by breakingviews.com, which started charging for its daily selection of opinions a few months ago, yet it has nothing like the range of services or archives available on wsj.com. It has not yet disclosed how many have signed up since it started charging in February but founder Hugo Dixon says he is "reasonably happy" with the conversion rate from free to paying users and that subscriptions "continue to rise."
But price is just a small part of the story. Kann cites four key reasons for WSJ's ability to sustain a fee-based model. Subscriptions are Kann cites four reasons. It has a strong brand and it owns much of the content so, says Kann, "it is not commoditized." Much of the information on the Web site also has what Kann describes as a high degree of essentiality. "It is a must-read or need-to-use."
But the fourth reason is perhaps the key to WSJ's success in charging. The WSJ is owned by Dow Jones, whose news wires are the leading providers of news in the US and the second biggest in Europe and Asia. That gives it access to more than 800 journalists who are already churning out news as it happens, news that can be immediately included on wsj.com.
"That is important as it means it is a dynamic, not static, site. The alternative would be to ask our print reporters to file their stories six times a day, which is not appealing, or to hire a sizable staff for the internet edition, which is very costly." In fact, it has about 100 dedicated staff.
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