The Wall Street Journal on Economists and Autism (and why isn’t the Wall Street Journal free online?)

After Slate wrote about an economics paper alleging a link between TV and autism, I blogged my skepticism regarding the claim. I haven’t seen or heard anything since that time to change my opinion.

Yesterday, the Wall Street Journal revisited that paper on autism, but also embedded the discussion into a larger question of whether economists and economic techniques should be aimed at answering questions outside of economics. It was a pretty interesting article, but unfortunately unless you are a Wall Street Journal subscriber you will have to take my word for it because the Wall Street Journal is one of the few newspapers that don’t give away most of their content free online.

As an aside, isn’t it strange that we live in a world where I’m puzzled as to why the WSJ won’t give away their product for free? In general, it doesn’t seem like a good idea to give your product away if you are a company, but given that most newspapers do, why doesn’t the WSJ? Is it that there is something different about their readership that makes free online a bad idea for the WSJ, but a good idea for others? I doubt it. My guess is that either it is a good idea to give free access or it isn’t. Either the WSJ is making a mistake or other newspapers that do give stuff away are making a mistake. I’d like to know the answer to this question, and I’m sure the newspapers would like to know too.


elhondo

I pay for the journal. I'd pay for the WashingtonPost as well, but they don't offer it.

Heck, I used to get the dead tree version out of a combination of guilt and the Sunday edition, but that got more and more silly.

What I'd really like is for a few newspapers to get together and offer up a "season pass" online. I read a few papers online, and I think everyone else who is used to the medium works that way too.

It doesn't seem like it would be that hard to offer.

mb11

The WSJ is doing the right thing, and it is likely that other "premium" newspapers with content of their quality will follow suit. WSJ is an expensive paper at $1/issue newsstand, and most of its readers have internet access and many are paid as business expenses, so it is a poor business model for them in particular to give away their content. NY Times already requires payment for its columnists since that is a large part of its "can't get it elsewhere" content.

Here's a great read on the issue

Andy from Houston

The WSJ is the paper of record for the those of us in the trenches. Too bad I had to cancel my subscription years ago because of their politically biased editorial section. I wouldn't mind a bias towards pro business thinking, but supporting one political party outright over the other - no matter what he issue - was just too much for an independant thinker like myself. I also factored exactly what you are referencing into the cancellation of my subscription to both the online and paper WSJ. It was no longer worth it when I could obtain much of the information for free on Yahoo. However, I do miss the personal journal. Not worth the price of admission alone, but I do miss it.

GamblingEconomist

They try to position the paper as an investment rather than as entertainment. The WSJ used to have an TV ad campaign where they would show the difference in wealth between those that read the WSJ and those that didn't.

Also, many companies will allow employees to expense the $100/yr in subscribing to the WSJ whereas they probably would not pay for subscriptions to the New York Times or Washington Post.

jaiwithani

Perhaps they feel that the market for online news is saturated, and that their entry now would (1) require a large investment to develop an online edition that could compete with other online papers, (2) take only a very small portion of the online market, and (3) compel many of their subscribers to cancel their subscriptions in favor of the free online version. These factors wouldn't impact papers already online, since they already have an established online presence and their subscription base has already adjusted accordingly. The Washington Post would be unlikely to gain many new paper subscribers if they canceled their online service, so it doesn't make sense for them to close that down now.

It's also possible that the WSJ readership really is different - presumably more conservative, for example. Given the cultural stereotype that liberals tend to be more immersed in all-things-internet than conservatives, the WSJmay simply believe that not much of their target audience wants an online version.

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linkcb

I think the logic behind WSJ's decision to charge for online content reflects a very simple econ premise: because they can. Clearly, there is a demand for their content is such that individuals are willing to pay for it.

I would argue that most other newspapers rushed to a "free content" model out of fear rather than solid business reasoning--fear of Yahoo, et al. They, of course, justified the move by succumbing to the siren song of ever-expanding ad revenues from aggregating eyeballs. It seems to me that only Google has gotten rich from this "pass-the-payment buck" business model; traditional media outlets certainly haven't.

The problem they now face is trying to put that genie back in the bottle. Once you give something away for free, it's really hard to charge for it again (see Comment #2 above as an example). I don't see a way out for them at this point beyond creating new content sources that are premium from the get-go.

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Jtapp

The WSJ makes heavy revenue off of university students. Business majors at my university pay for a subscription to the WSJ as part of their mandatory student fees.

A good should only be publicly provided if it is 1.) non-rival and 2.) non-exclusive. The WSJ has found it can exclude others and therefore provides the good privately.

There IS a way to get around this, using certain newsreader services like Congoo that allow you to read subscription content in exchange for putting spyware on your computer...

neal

No mystery, I think: it is interesting to note that The Economist and The Financial Times also charge for most of their content. Are Economics/Business papers more rational or savvy? I doubt it. They charge for online content for the same reason that they have a high cover price for the paper version: the FT is £1 (c$2) at the stand!, while many British newspapers are essentially free.

The WSJ and friends appeal disproportionately to high income readers who are relatively price insensitive for small expenses. Other newspapers appeal to a wider, more price sensitive market. Price sensitivity may also relate to the degree to which rival newspapers are viewed as close substitutes, and high end financial papers may even gain a certain cachet by being expensive: are they "positional goods"?

seamusmccauley

The cost of a WSJ subscription (online or off) isn't borne by the reader. It's a business paper - readers run an annual sub through expenses. The FT in the UK also charges for access, lending weight to the "it makes sense for business papers" interpretation. If you're writing for a business audience, you can rely on most of them not having to pay themselves.

It is perhaps therefore no coincidence that a WSJ annual sub is $99, an FT sub £98.99 - both just under the threshhold at many companies in their respective domestic territories at which expenses need approval from higher up the organisation.

Daedalus B. Logos

The issue is similar to “why no one but hotels subscribes to USA Today.” The internet is changing the news reporting paradigm; yes by altering the revenue model (marginalized access) AND stating the case for relevance. The USA today is only relevant in providing a paper to a faceless American for a couple of days staying in hotel because a local paper would likely not be relevant to the patron (and yes the hotel chain only wants one vendor instead of 1400 little ones). What the news business is losing is relevance beyond local reporting. Even in local reporting, all the news media (TV, Radio, Joe down the street, etc.) is very competitive. What newspapers in particular are losing is the stage beyond their borders. Therefore WSJ maintains a focus on the business world which is generally more relevant to most of its readers on a day to day basis to a generally larger audience. For example, the only way I am connected to anyone in Chicago is because of business: I want your money and you want my product. So, business in Chicago is relevant to me. The local Arts and entertainment is not. The membership program and tax benefits are just shrewd business tactics which shouldn't be a surprise coming from a business newspaper. Why newspapers are suffering is that they need to stop running news articles off the AP wire that every other newspaper is running, but run with articles relevant to their readers. Having membership helps them to find out what they want. They could actually mine that data and provide greater relevance and instead give up and turn themselves into USA Today. Newspapers need to differentiate. Now, if I am on the road in Santa Fe NM, when I grab the morning newspaper it's not the USA today but one from back home, I might actually read it.

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Sloar

The Wall Street Journal has had some odd distribution patterns for many years. It is one of the very few newspapers that does not distribute news through a variety of commercial aggregators. WSJ has an exclusive agreement with Factiva so if you subscribe to other aggregation services like Nexis or Dialog you are simply out of luck. This doesn't really explain why WSJ thinks they can/should do this, but it may be another part of the puzzle.

lloydalter

The WSJ has been losing readership for a few years because nobody under the age of 30 knows they exist. If you write blogs, you quote the information sources that you can link to or your readers can't see what you are talking about. In the short term their readers are rich enough to pay for the service; in the long term they won't have too many of them.

Endymion

The WSJ, regardless of its presentation, is not really a newspaper. It's a trade publication, a daily almanac. Real newspapers have essentially given away their content forever--that was the innovative concept that created the industry. The newsstand and delivery prices often don't even cover shipping, let alone ink. A true newspaper is an advertising venue, and that is where the paper makes its money. Only the most respected publications can squeeze out an extra quarter or so on the strength of brand loyalty or reputation. The original columns were simply an editorial privilege, because people can often be paid less if you give them a chance to feel important. The modern column idea is fairly new, an attempt, via celebrity, to steal back readers from the soft-news magazines (and now 'blogs) they fled to after the recent divorce of politics and reporting. As the Internet reduces distribution costs to almost nothing, many papers are crippled by their reliance on this proprietary-content strategy(which is so 20th century). If the WSJ were really a newspaper--if the NYT were still wholly a newspaper--then giving away their content would be feasible, but since much of that content is, ostensibly, the product of talent rather than labor, there's good reason not to. Another thing to consider about 'unique' content is that, if you put that in the print edition I have to leaf past every ad between the front page and column or chart, but if you put it online I'll just follow a link on some crazy econ site and miss all the ads that aren't right on that one page.
On a completely different note, I initially misunderstood the title of the post. But, are there studies about autistic economists?

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pasinpsycho

I wonder what conclusions could be drawn by comparing the WSJ to the other NYC newspaper behemoth: the NY Times, which has almost the perfect inverse of the WSJ's free/paid business model, i.e. the WSJ puts its opinion pages out on opinionjournal.com so anyone can wade through the cesspool without paying, but the Times will make me pay for the privilege of reading Krugman or the "privilege" of reading Brooks; the Times will let me read tons of stenography surrounding the occasional nugget of journalism for free, while the Journal apparently produces good journalism on a regular basis (or so I hear--I'm not in the income bracket to subscribe).
To summarize:
Times Journal
News Pages Spotty but free Good but costly
Op-Ed Pages Spotty but costly Nutty but free

I dunno, I think I have to fall back to my default position that there are always a certain number of people that will pay for brand X, and if that number is high enough, brand X can survive on a subscription basis, online, in the real world, wherever.

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pasinpsycho

Let's try that table again

Times Journal
News Pages Spotty but free Good but costly
Op-Ed Pages Spotty but costly Nutty but free

pasinpsycho

One last time, old skewl
..................Times................Journal.....
News Pages.....Spotty but free......Good but costly
Op-Ed Pages....Spotty but costly....Nutty but free.

phdstudent

As my economics courses taught me, don't differentiate unless you can differentially price. Apparently, WSJ has found a way to differentiate. Until they started giving it to me for free in exchange for strong-arming enough of my students to pay for it, I gladly paid my annual fee, even when I became a poor grad student. It's content that you just can't get anywhere else.

Well, now that I'm a poor grad student, I guess I can get it for free from Factiva, but it's really a pain to read any news source that way... it's great for searching but lousy for browsing.

yorkd

The mere fact that a blog links to a paid site (like Salon and WSJ) has value. The hyperlink helps us with our Web2.0 tagging, categorizing and other prejudging operations. Links to paid sites tend to signal to the world that you 1. care enough about the content on the site to pay for access and/or 2. can afford to read their articles. In some ways, the paid subscription gives more legitimacy to the quality of the Web 2.0 gestalten that we tag to your blog. Thus, value is created ... even to the nonsubscriber.

Why doesn't the WSJ give away it's news? Heck, why don't the libraries give it to us? There are virtually tons and tons of academic journals, filled with much more than news ephemerons, which we'd like to read. The barrier to the WSJ is much lower than the barriers to research and knowledge coming out of colleges, universities and other organiztions funded with public monies. It seems like an old fashioned "library problem" to me. Aren't there people who are supposed to be experts at solving these types of problems?

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Snow_Bill

I'm sure that part of the reason is the income of the readership. I read
some years ago that reader's average income ws $150,000. In googling
about, I see one report it is now $191,000 with an average household net
worth of $2.1M. It is hard to imagine any other paper with numbers like
that, so perhaps they are unique?

valisjason

Two factors. The first, as has been mentioned previously, is the unique nature of the Journal, appealing to a skewed population distribution relative to even the NYT.

But, I think the second factor, and maybe most important, is a story of path dependence. the Journal started charging for online access at the very outset, well before online content access was the norm. They made money, and continue to do so. Its an open question whether that will pay off or hurt them down the line. But, its the path they are on, and I doubt they will change that path anytime soon. Same goes for the NYT and most other newspapers which started out (and most continue to be) solely free of charge. NYT is trying to change their path, or create a hybrid path. No one else is doing that.

Having lived in both LA and NY in the last 5 years, I can say that easy online access removed any incentive I had for purchasing a hard copy subscription. Though, I do also pay for a WSJ journal online sub (or at least my business oriented wife does) and a NYT premium access sub.

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