Optimism despite nonprofit
WSJ.com Editor Rich Jaroslovsky Sees a Second Dawn for Print Products Online
They are rare, the online offers with commercial success. Very rare. This was once again revealed at the traditional Zurich "Dreikönigstagung" on the subject of "Success models in online business". The few successful examples are passed around like sacred objects. That's why Rich Jaroslovsky, Managing Editor of the financial website WSJ.com, was not only in demand at the Media Institute event.
Journalists were already queuing up beforehand, reported Karl Lüond, head of the Media Institute. Everyone wanted to hear Jaroslovsky explain how to make Internet sites financially attractive. Because as the Internet euphoria has grown older, so has the disillusionment that such offers mainly cost money but bring in very little. And this despite good and still increasing use by the public.
Launched in 1996, the Wall Street Journal's online offering has had plenty of success. The year 2000 was a boom year and a milestone for WSJ.com: last year alone, the world's most successful financial site increased its number of subscribers by 52 percent. In the fall, the 500,000th paying subscriber also registered. Fantastic. And now there could be another boost. Rich Jaroslovsky is currently touring Europe to infect the local stock market and investor public with the WSJ.com virus. And there is certainly still considerable potential here, as only 15,000 of the site's half a million subscribers live on the Old Continent. However, this also has to do with the fact that WSJ.com only started marketing in Europe a few months ago.
Rosy public market,
Thin financial results
However, despite rosy prospects in the public market, revenues are not exhilarating. Even WSJ.com, which is passed around as an example of success, is not yet earning any money. The financial site expects a turnover of just 51 million US dollars for the year 2000. 60 percent of this comes from the advertising market. Although things are moving forward in leaps and bounds - the advertising volume rose by over 50 percent last year - this is only a fraction of Dow Jones & Company's total revenue. And this unattractive size ratio is unlikely to change any time soon.
But Jaroslovsky is already certain of one success: subscriptions to the online version do not come at the expense of the magazine. "Two thirds of WSJ.com subscribers were never subscribers to the Wall Street Journal," says Jaroslovsky. The feared cannibalization of the print product has therefore clearly not occurred in this case. For Jaroslovsky, this is a reason to celebrate: "We have proven that print and online can complement each other."
For the 59 US dollar annual fee, however, the newly tapped user group is also spoiled. For a third of what the paper costs per year (175 US dollars), they receive the world's most comprehensive range of financial information from Dow Jones & Co as a complete package (see box). And the online offer also includes all texts from the current print editions: the American Wall Street Journal as well as the European and Asian editions. The winner is clearly the user, who only pays a fraction of a single print subscription, but gets a lot more information in return.
The advertising platform WSJ. com. Around 30 million US dollars in revenue from commercial communication last year is not much compared to the numerical strength of the target group and the low scatter loss that WSJ.com can offer. 98 percent invest money. Half of the users have an average annual income of 125,000 US dollars and work in top management. 56 percent also access WSJ.com from there.
Attractive user profile, but
little money from the advertising market
This proximity to the profession also points to another advantageous specialty that the sites of other print media can only be envious of. This is because the relationship between WSJ.com and its users is a true B2B relationship: the latter seek information there that directly influences their transaction decisions. This does not mean that other newspapers do not also provide relevance, but the distance and relationship to the action are much greater and more complex.
Despite the much less direct reference to action, the WSJ.com editor is also optimistic about the other print media sites. But only if they are absolutely committed to one principle: "The public will value products that meet their needs."
Will the payment model get a chance after all?
Jaroslovsky believes it is high time to return to the payment model. "The providers of online content need to take another hard look at it," he advises. In doing so, they also need to iron out a mistake made in the past. The most important mistake was made by the providers themselves by simply giving their information away for free and not changing it.
"If you do this for a long time and then suddenly come and want money, the users naturally don't agree." That's probably why a trick has to be used. "If sites want to develop the payment model, then they can't avoid justifying this with new service offers," Jaroslovsky is convinced.
However, in order to successfully position entertainment and an expanded news offering as "valuable" alongside business news, a few other conditions must be met. Jaroslovsky's recipe: "Exclusivity and information in special niches, that's what people pay for." But packaging is also important. So far, this has not been trimmed enough for its sales-promoting suitability. "You have to package the information in such a way that users can see the value they are paying for. That is the challenge."
But Jaroslovsky is also convinced that there is still a long way to go before the payment model for the use of online content is no longer just an exotic exception, as in the case of WSJ.com. But he is fundamentally optimistic. The know-how in the creation of online offers has matured to such an extent that it is now becoming increasingly possible to exploit the potential of the Internet. "The providers will come up with very individual answers and they will be good and valuable answers." But there is still a lot to do before the "valuable" really starts ringing in the cash register.
Dow Jones & Co. will give (almost) anything for 59 US-$
Dow Jones & Company, which is over 100 years old, is the world's most comprehensive and renowned source of information on the financial markets. And the financial site also draws on this. WSJ.com has access to a network of more than 1800 business journalists and reporters for its content. The online editorial team alone employs 250 people, 80 of whom are involved in the production and editing of texts, the others in technology, marketing and administration.
In terms of content, WSJ.com offers everything the investor professional's heart desires: a comprehensive range of information on economic events with reports, analyses and market data from the financial markets around the world. Users have access to 22,000 background reports on listed companies. And they can browse the entire Dow Jones Publications Library with over 75 million articles to satisfy their hunger for knowledge. The exclusive service naturally includes daily personalized e-mails with tailored top news and news folders with up to five personalized investment portfolios.
Additional info power included in the 59 US dollar annual fee: All current content from all three print editions (The Wall Street Journal, The Wall Street Journal Europe, The Asian Wall Street Journal) as well as the Sunday financial paper Barron's are also included in the WSJ.com offer.
Comment
Learned a lot - earned nothing (yet)
From Daniel Schifferle
The disadvantages of the internet platform compared to the print edition are striking: much less money from users, much lower advertising revenue - and for a much richer product than the newspaper. This is clearly demonstrated by the Wall Street Journal's online offering, even if it is now being passed around as a beacon of hope for disillusioned sitemakers. The fact is: WSJ.com subscribers get access to a huge information package including all three issues of the Wall Street Journal. And all this for a fraction of the price they would pay for a single newspaper subscription.
In any case, the user is currently the winner. The losers are the providers of information, as they offer it online at much lower prices or even for free. This means that publishers are experiencing a drastic drop in the price of their services on their online platforms. This is dangerous, because the longer they offer their texts online for free or much cheaper, the more permanently they undermine the consumer's sense of the price of high-quality information.
And even as advertising platforms, the online offerings do not yet have the value they could have. WSJ.com has a huge and extremely attractive target group. But the advertising revenue it generates is a pittance compared to what the same target group would generate in print.
Despite the looming threat of a devaluation of both the information service and the advertising platform, the print media have learned at a pace hardly ever seen before thanks to the online world. Distribution in particular is undergoing a real revolution. New platforms and channels are making it possible to diversify information services, thereby tapping into new user groups and generating new forms of customer loyalty. Turning this power into money is the big challenge for the future.
