IP Democracy: The WSJ's Death Knell for Premium Content Providers

It's all but official -- the Wall Street Journal will tear down its pay wall, according to new owner Rupert Murdoch. This development will hammer a nail into the coffins of online publishers (with a few notable exceptions) who still maintain a pay wall in order to charge for content.

The Wall Street Journal has long been the poster boy for successful online premium publishing, having garnered a million subscribers who generate $50 million in subscription fees. Another major media publisher who still holds onto its locked-in status is Consumer Reports, which must surely be suffering.

Just this past week I was forced to buy a new car. In years past, I might have signed up for a Consumer Reports subscription to gain access to the publication's first-rate auto reviews. But, this go-around I discovered instead a treasure trove of alternative resources, including the incomparable edmunds.com.

With so much high-quality competition, I don't see how Consumer Reports survives, at least on the Internet. On the other hand, the Wall Street Journal isn't dealing with questions of survival (well, not in the short-term anyway). It's dealing with the cost-benefit of switching from paid to free and obviously has decided that free is the bigger money-maker.

Most premium publishers will reach the same conclusion, or else dwindle away to nothing. The notable exceptions I mentioned are publishers of highly specialized content for which little competition exists -- juried medical and scientific journals, certain investment newsletters or extreme niche publications that have devoted readers. Everybody else has got to change their business models.

If the most successful premium Internet publication of all time thinks that it ought to be free, who else can make a go of it?

Posted by Cynthia Brumfield on November 13, 2007 4:17 PM to IP Democracy