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Fee content vs. free content

The Wall Street Journal and The New York Times may drop pay-to-read content. But online ad revenue alone won't cut it.

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Many in the newspaper business have embraced the Internet warily. For all the promise the Web platform has, it also holds some big pitfalls.

Yes, the online world offers potentially broader audiences and the promise of cutting costs by slicing into publishing and circulation expenses.

But the free content model on the Web is particularly scary for newspapers.

If the content online is free, why would people bother to subscribe to the paper? And once enough readers flee, circulation falls and advertisers find less reason to buy ad space. Perhaps even more alarming, the numbers increasingly suggest that online ads may never match the revenue base that print ads do.

This is precisely the situation many newspaper publishers find themselves in today. They can't ignore the Web. They understand they have to find a way to move online. But they aren't exactly happy about it and they are unsure how the economics are going to play out.

The last two weeks have only added to the sense of uncertainty.

The American newspaper industry's two giants – The New York Times and The Wall Street Journal – which have both made users pay for some content, are reportedly looking at giving in and joining the free-content crowd.

For the Journal, the speculation has come with the purchase of the paper by Rupert Murdoch. Some believe that Mr. Murdoch's goal is to make the Journal much more than a required read by the nation's MBA class. Many analysts believe he wants to make the paper a national, politically conservative alternative to the Times.

That goal, plus the desire to increase online audience and ad revenue reportedly has Murdoch thinking about removing the Journal's pay-to-read firewall – or at least parts of it. There are roughly 1 million online Journal subscribers each paying $79 a year. It has been a remarkably successful exception to the mostly free-content world.

For the Times, the question is about the fate of TimesSelect, the enhanced online subscription that the paper launched two years ago. The Times made some Web content – namely the paper's prominent columnists and some online bonuses – available only to those who paid $50 a year or subscribed to the print paper. It was aimed at the I-need-my-Tom-Freidman-now set.

How big is that crowd? There were about 225,000 of them as of June.

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