The Economist Eats the WSJ's Lunch

Because there is so much information available on the internet free and because more and more people are using the internet as their main source for information, consumers of information content are becoming more discriminating. Interesting, well-written, thoughtful content thrives and boring, poorly written, mindless content gets little or no traction or traffic among educated, discriminating consumers.

And because there is so much information available free, surfing for good content is free and easy and, therefore, it's easy to break old information consumption habits and to sample new content and switch preferences.

So, in these conditions, what business and economic information content is thriving and what business and economic content isn't?

Obviously, most business content printed on paper and distributed the old fashioned way via the mail or newsstands is dying. Not only are readers going away, but advertisers are deserting most newspapers and magazines faster than consumers are -- with one exception, the Economist.

In June, Folio reported "Economist Group's Profit Jumps 26 Percent."

The London-based company, which publishes its namesake magazine, reported approximately $92 million in operating profit, up 26 percent over the previous 12-month period. Revenue was up 17 percent to roughly $514.2 million.

The Economist uses a business model that Chris Anderson in his book Free refers to as freemium. In other words, the Economist gives some content on its website away free but charges for full access to all of its magazine online content. If you want to get full online access, you have to subscribe to the print edition, which costs $126.99 a year, for which you get a special world business forecast issue, 20 special reports a year, and a technology quarterly supplement.

Rupert Murdoch's Wall Street Journal also uses a freemium model. You can get free access to some of its content on the Web, but full access to the same information that is in the daily printed version costs. The WSJ's pricing model is $1.99 a week ($103.48 a year) for Web only access, $2.29 a week ($119.08 a year) for just the print edition delivered to your home, and $2.69 a week ($139.88 a year) for both the print edition and full access to the website.

The Economist makes a lot of money and the WSJ loses a lot of money, even though they both have a freemium business model for their Web offering. Why? Because the Economist prints and sends in the mail a magazine once a week and the WSJ prints and delivers by hand or sends in the mail a newspaper daily. The WSJ's costs are a lot higher.

But lower costs are not the main reason the Economist is growing faster; its content is better. And the WSJ's is getting more boring and less about business under Murdoch.

Mark Potts, who blogs as the Recovering Journalist, writes:

Longtime Journal fans (and I'm one) worry that the paper has moved too far away from the insightful, savvy and even entertaining coverage of the business world that had been its bread and butter for decades. The Journal's day in, day out business reporting -- with some very notable exceptions -- has become much more pedestrian lately, scrubbed of many of its formerly lovable quirks. That may reflect a recognition that a great deal of good business reporting and analysis is widely available elsewhere on the Web, something that threatens the futures of business-news stalwarts like BusinessWeek (for sale), Fortune (being redesigned and rethought, yet again) and Forbes (in management turmoil). In that context, the Journal is just smartly tacking in another direction.

Still, I miss the Journal's depth and insight into business coverage. It's just not as interesting a read as it was before Murdoch. The formerly wonderful and eclectic Marketplace section has been gutted, for instance, and a lot of the paper's former personality has gone by the wayside. That's what made it valuable and unique, and I daresay it's one of the things that made its much-vaunted online subscription model a success. Subscribers paid for the online (and offline) version of the Journal because there was nothing like it as a source of vital, interesting and readable financial news and information.

The Economist's content is intelligent, well written, and well researched. And because it's the best business and economic content on the Web (and in print), it can charge for it (although not quite as much as the WSJ does) and continue to sell ads at high rates because of its desirable audience.

This is a trend -- people will pay for excellent, intelligently written, insightful content because it's now easy to find it on the Web. Discerning people will stray from boring, unremarkable content because news brands don't mean as much as they used to.

The New York Times has lost its brand for reliable information, except in art, culture, and food, and the Wall Street Journal under Murdoch has lost its brand for insightful, well-written business coverage.

No matter what kind of brand it is (news, information, celebrity gossip, or tech gossip), a brand has to earn its stripes every day in the open, searchable, free environment of the Web. The Times and the WSJ have lost their business information stripes by being inaccurate or boring or irrelevant (or all three).

And the Economist has eaten their lunch.

Follow Charles Warner on Twitter: www.twitter.com/CHWarner

Comments

[NevaforLeadership]

I would pay for the Economist online; not the WSJ.

The Economist is a broader publication.

[PSM42]

WOULDN'T TOUCH THEM WITH A TEN FOOT POLE

The Economist can have useful information. But it is so marinaded in propaganda as to be intolerable.

For example - "Media Disinformation; Britain's The Economist backs down over misleading its readers on Venezuela" - http://globalresearch.ca/index.php?context=va&aid=14626

More - http://www.huffingtonpost.com/2009/03/14/the-economist-knocks-alan_n_175004.html?show_comment_id=21970102#comment_21970102

[amygdalalama]

The Economist and the Financial Times have far better reporting than the WSJ, at least ever since Rupert Mardok (er, Murdoch) bought it.

[jacobomorales]

Everyone knew this was going to happen. I have seen it and this is why I stopped reading it. The slant is so obvious.

[mamacat]

Once it was reported that Murdoch was taking over the WSJ, it became obvious that its content would become unreliable. Why else did so many of its old time workers quit? For whatever reasons, Murdoch wanted to be able to use the (formerly) good name of the WSJ as a glorified soapbox for his right-wing nonsense.

When I read or watch or listen to a news source, I would like to be able, at the very least, assume that the source is making an attempt to be impartial. If I know that the source is being used as a political platform for lies and misinformation, then why would I want to waste my time and money on it?

[CaroleKM]

The WSJ Op-Ed page is poorly researched and inflammatory Republitard rantings. More holes in their facts than shell-shocked Swiss cheese.

The New York Times is at least well-researched and thoughtful. The Economist remains the gold standard.

[DamaskinosWasRight]

=

WSJ has some good articles but you are right about the commentary.

The future of online commentary and news may go the way of a group subscription model, where one fee gets multiple online sites:

details : http://corporatestatesmen.org/images/Subscription_Federation.pdf

more: http://corporatestatesmen.org/policies.html

+

[kanaschwiiz]

I regularly read the WSJ and have subscribed to the Economist since 1995.
I have been quite irritated by WSJ editorial positions in the last few years. I think another reason for The Economist's relative success is their editorial position on various issues: The Economist is socially far to the left of the WSJ. The Economist (tepidly) supported Kerry and (rather more enthusiastically) Obama. The relatively educated target readership tends to be more socially tolerant and Democrat-leaning. The Economist is not only about free markets but also about free-thinking. It was late to recognise the threat of global warming but it's certainly much better on the environment now than the WSJ. On any number of issues the magazine is more enlightened.
If you want unbiased broadsheet business reporting you go now to the FT - the WSJ is too tainted by Republicanism.
In other words, the other thing that makes the WSJ a loser is it's social conservatism.

[swift goat pet for truth]

As a progressive, I WELCOME well thought out conservative positions.
I WANT to hear their arguments and analysis.

I decry screeds, especially when they ignore many salient facts.

I love the Economist. I had to fight my wife to spend the extra money.
I refuse to pay anything to read the WSJ. I hardly ever finish reading even the free stuff.

[Aaror]

Before Murdoch the WSJ WAS where you found well thought out conservitive positions. They had to be well thought out and strong because money was made or lost by them being as correct as possible. Murdoch thought he could throw away the fact checking as irrelivant, which made the paper useless to investors. Who were the buyers of the WSJ? Investors.
Oops.

[hoopesaz]

"Interesting, well-written, thoughtful content thrives and boring, poorly written, mindless content gets little or no traction or traffic among educated, discriminating consumers."

I would take issue with that. Take Huffpo as an example. It is thriving, but not because it is a center for well-written, thoughtful content. Some of it is, of course, but it's generally a jumping off point for inflamatory one-sided articles that lead to heated discussion among readers.

Salacious articles drive traffic. I may be unique in my view, but I think big media suffers significantly because people are LESS interested in well researched objective reporting...they would rather read opinions that validate their own and argue with those who disagree. I'm on Huffpo more than WSJ or the NYT because of the comments, not because of the content.

[Ben6768]

I agree, the comments are the real fun part : funny, crazy, insightful, whatever ....

Aside from well written aricles like this one from Mr. warner

[swift goat pet for truth]

HuffPo comments are generally of a higher quality than other sites I have been to.

Politico comes to mind. It is just name calling.

But HuffPo readers provide some nice insights from time to time.

[commentator101]

I revere the Economist, and like the FT, but neither is a substitute for the WSJ. The Economist as a weekly obviously doesn't attempt to break news or do detailed daly coverage; and the FT only covers major American business stories. The Journal is much more in depth on companies, statistics, etc.

I have been reading the Journal only sporadically in recent years and can't really comment on the post-Murdoch changes.

[Mannock]

Gore Vidal once noted that The Economist is probably the best news magazine in the world, whether or not you are on par with its politics. He said that it is seldom wrong...because it cannot afford to be wrong. I used to read the WSJ in the 80s and even then I found it tawdry with bad writers, often new grads from Harvard Bus and Wharton, and typos galore. That in itself would make it appealing to Murdoch.

[skyshoes]

Am I the only one?.. I lost all respect for the WSJ when it came out that one of its "journalists" was writing speeches for Bush one, two or three economic crashes ago. Long before Murdoch. Only now, on the web, do I notice a few sensible articles not towing the corporate rapist line. C- could it be..? The Wall Street Urinal is... i.. in fact.. Better with a pruned up Aussie at the helm?... Nah

[RobinSeattle]

The problem with the WSJ is that it is largely merely a stalking horse for the RNC. The Economist, even though they aren't exactly liberal, just doesn't have that same feel of party hackery that the WSJ does and its articles are more well rounded and thoughtful.

The Financial Times is also quite good.

[joebaggadonuts]

Agree completely. FT seems more reliable and objective than the WSJ. I canceled my subscription to WSJ the first time I saw the Murdoch slant start to appear. I used to read WSJ religiously pre-internet. Now, the only time I find myself there is through a linked to article. They were losing credibility pre-Murdoch, and the FT replaced what I was getting from them with less slant.

Disagree about the article's slant on the NYT though. They have the best opinion pieces, and widest news coverage. IMHO they started to lose with their premium service selection cutting out the opinion section from free readership. Good for them they abandoned that business model. Wishing them success.

[kanaschwiiz]

Couldn't agree more about the NYT editorial and Opinion section quality - it plays a huge and vital role in the American political discourse. I would pay for access to Collins, Brooks, Krugman et al.
(Being Swiss-based, though, I don't want to pay for access to local NYC pieces, and I think this is an important segmentation issue. They'll need to decide if they are a local, national or international paper. The Economist is clearly international and every reader knows and expects that - I think my friends and I get 90% of what we know about Africa or the Pacific island nations, for example from the Economist).

[MajorKong]

The Economist is politically center-right.

[FoonTheElder]

The WSJ thinks it's center-right, when it is extreme right.

[kanaschwiiz]

I respectfully disagree about The Economist being politically centre-right. That's true perhaps of their coverage of British politics, but on any number of global issues (homosexuality, the Middle-East, health-care reform, stem-cell research, etc.) they are certainly to the left on an (admittedly skewed) American continuum. I recall their coverage of other things (Cuba & the Gonzales kid, anything Bush from Hariette-Myers nomination to hurricanes and "Brownie" at FEMA, that Sciavo(?) brain-dead woman, euthanasia, etc.) where they are socially liberal. Their writers and readers are too educated to be too far right-of-center (I don't mean to be judgmental - the university graduates who are Economist subscribers are far more socially liberal than average). Remember they endorsed Kerry and Obama (and I suspect regret having not supported Gore).
Yes they were caught wrong-footed at first about the Iraq war and global warming (they had an early love-affair with Lomborg) but they've come around a bit here too; I've noted a definite change in their environmental reporting in the last year or so.

[CharlesWarner]

Yes, The Financial Times is very good. Murdoch would have done better trying to compete with it rather tahn going after The NY Times.

[BrianJaklitsch]

As a recent subscriber to The WSJ, I can't speak for what it was like before Murdoch took it over, but I can say that I like it now. I don't know what else to say, except that it makes a good two-fer paired with The Times. I think you're wrong when you say that paper is irrelevant. I just wish it were a little more focused on certain things at times.

But let's say that it is suffering compared to what it used to be. If that's the case, I wonder how much of it is due to people who have left the paper because they were worried that their work would suffer under new ownership. If true, it could create a cycle where the quality of the paper keeps going down as more people fear their reputations will sink.

I don't think this possibility is entirely related to Murdoch trying to turn it into a more of a national, general interest paper in addition to being a must read for businesses. Unless he forces them to stick to a pretty strict budget, what's to stop him from pouring money into the paper while still keeping the business side strong? Depending on what his limit is, he can keep the same level of resources invested in the business side while still expanding the general interest and cultural side. But does he want to? I do think it's a matter of him not caring that much.

[CharlesWarner]

I thinkMurdoch has invested in more coverage, but my complaint is that the writing has become pedestrian -- not nearly as interesting to read as before, although its content is still good and it does break some business stories. It's columnists are generally quite good, also.. But the content, overall, is not as good as that of The Economist, and the WSJ is nowhere near a profitable as The Economist.

[swift goat pet for truth]

WSJ used to be darn good.
Would not read it for free now. I tried. Not worth my time.

[nowThenzen]

the newscorp imprint was the KOD for the WSJ, QED!

[RaderBarbarian]

"This is a trend -- people will pay for excellent, intelligently written, insightful content because it's now easy to find it on the Web." Excuse me? is this a typo? People will NOT pay for "excellent, intelligently written, insightful content" exactly BECAUSE "it's now easy to find it on the Web." If this is not a typo, can this statement make any sense? If you meant to say "NOT easy to find it on the Web," then I think you are mistaken. Content is everywhere - and it is free, and some of it is business-related content. Some of it has been lifted from behind "walls" and freely dispersed whether the publishers like it or not. Do you think this will stop? All it takes is one paid subscriber to disperse it for it to become freely available despite having been published behind a "wall".

[CharlesWarner]

But people are paying for good content on the Web -- The Economist and the WSJ charge for content. It is a trend -- the NY Times is considering charging for its conent (really a freemium model like the WSJ and The Economist, I'm guessing).

[BrianJaklitsch]

I don't see why the paper would lock all content behind a paywall. It's not as specialized as that of The Journal or The Economist, and it probably needs a lot of page hits to generate ad sales. But unlike a lot of people, I think a small charge for content could work pretty well for The Times.

[kanaschwiiz]

I suspect it might work - I can only speak for myself but I would pay NYT content access online (depending, of course, on the price).

[larry278]

Don't forget that the UK's Financial Times is attracting a portion of the WSJ's former users. If you want timely, reliable busniess & economic information use the FT & Economist. His Rupertship is resolute in his plans to turn the WSJ into a general interest paper. No American operation is trying to fill the vacant title of America's financial newspaper of record since Murdoch abandoned the WSJ's title to it. Our friends in the UK have that title in a de facto sense. Americans now get their financial & economic news from UK media.
America may not have enough well versed financial/economic writers anymore. That market &/or niche is the property of the Brits.

[CharlesWarner]

Good point. The Financial Times does cover business and financial issues well, from what I hear from people who know (I'm not a reader of the FT).. I believe you are right that Murdoch wants to go after the NY TImes as a source of general interest news and has thus, made the WSJ much duller.

[BrianJaklitsch]

Do you have any numbers to back up that claim?

[swift goat pet for truth]

I like the Pink One.