A Free Wall Street Journal Puts Pressure On Financial Times

Posted Aug 11, 2007

Now that The Wall Street Journal is in the pockets of Rupert Murdoch and his News Corp. crew, Murdoch has the power to make changes to the most powerful financial news publication at his own discretion.  And Murdoch said that he might make The Wall Street Journal free.  The advantage of this is that more users will flood into the web site and that would increase advertising opportunities. 

But there are a couple problems with making the WSJ free.  Less people would want the actual WSJ newspaper.  With less people wanting the newspaper, that would mean less jobs for paper boys and the graphic communications department.

The second problem is that the U.K. equivalent of The Wall Street Journal, Financial Times might be pressured to become free online too.  The Financial Times is owned by Pearson PLC (NYSE:PSO).

Usman Ghazi, a Dresdner Kleinwort analyst stated, “If the Wall Street Journal goes free, the marginal buyer of the FT is going to say ‘hang on, why am I paying for a service I can get for free elsewhere?'”  The price of the online subscription of The WSJ is about $99 and FT.com subscriptions range from £99 to £400.

Polo Tang, a UBS media analyst has a different viewpoint than Ghazi though.  “Even assuming a worst case scenario, where all these (Web) subscribers were lost, there would only be around a £7 million impact, suggesting only around 1 percent downside risk to group profits,” stated Tang.

Regardless, as long as there is free content out there, plenty of advertising will follow.

[1] Reuters: Murdoch free wsj.com plan raises risk for Pearson