Wall Street Journal’s Emerging Online Strategy
May 21, 2009 by Raj Sheelvant
Creative Destruction as defined by Joseph Schumpeter, the noted economist, is a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Read more about Creative Destruction in my blog titled “Creative Destruction at the Speed of Thought”.
Creative Destruction is in full display in print media industry. Because of Internet, print delivery model is getting obsolete. Blog and Webzines are challenging the old traditional media companies. More people now go to web sites to read news. Newspaper, in its current ‘avatar’ is getting irrelevant. Warren Buffet, the world famous investor has a dim view on newspaper business.
Classic Newspaper delivery model is ‘push’ model, i.e Media Company owns the process of delivering to the customers. But today the customers, especially younger generation, want a ‘pull’ delivery model. They want to be in charge as to how and when they are going to pull the news from the source. Either the newspaper has to reinvent itself taking advantage of emerging business model, or risk going bust. I think News Corp that owns Wall Street Journal (WSJ) understands the changing environment. Even though WSJ has a strong brand presence in print media world, it has been slowly losing its customers to online media.
So, News Corp is planning to introduce micro-payments for individual articles and premium subscriptions to the Wall Street Journal’s website this year according to Financial Times article titled Micro-payments considered for WSJ website. I think this is an interesting way for WSJ to monetize their content. It not this only allows WSJ to tackle eroding revenue, but WSJ using Internet can now achieve First Degree Price Discrimination.
First Degree Price Discrimination or Perfect Price Discrimination is when consumer are charged the maximum amount they are willing to pay for each unit of a good. It achieves mass customization in Market Segmentation. Internet now can help WSJ fine tune its pricing structure to maximize its profit. It remains to be seen if WSJ can regain its revenue share. But, I think it’s a milestone in the news industry’s race to find better online business models.
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