Najberg Mumbrella Interview
Published on: Mar 3, 2016
Transcripts - Najberg Mumbrella Interview
Wall Street Journal Asia digital editor Adam Najberg on the
business of paywall journalism
Adam Najberg is digital editor for Asia at the Wall Street Journal, the first
newspaper to charge its readers for content online.
In this interview, Najberg talks to Mumbrella Asia’s editor Robin Hicks about the era of
“creative destruction” for publishers, what the WSJ has learned 17 years after putting a price
on digital content, and how paywalls have changed the way journalists write.
How have the rules changed for publishers in terms of the content they can
charge their readers for since WSJ first put up its paywall?
You’re going back a long way in history. We launched our site with a paywall in 1996. At that
time, we were virtually alone. A lot of publishers stubbornly resisted the use of a paywall
and launched “free” sites, supported by advertising. The problem with that is it’s then nearly
impossible to walk things backward, once you realize the traffic isn’t what you expected, the
ads aren’t bringing in as much as you hoped and readers aren’t willing to pay for something
that you once gave them for nothing.
WSJ.com: paywall since 1996
We’ve always believed that people place more value on something they have to pay for and
less value on things you give them. We’ve accepted that WSJ.com isn’t going to be for
everyone, though we have consistently expanded our offerings outside what you’d consider
traditional WSJ fare – the business and finance news – and have grown our audience online.
We now offer “softer” content, including New York coverage, lifestyle coverage, a couple of
magazines, sports stories and more. We’ve been consistent. Ours is not the only way, the
only business model, but it’s the best way for us.
You asked how the rules have changed. For us, they fundamentally haven’t. For other
publishers, after flirting with free content, there have been paywall phases, dropping of
paywalls again, experiments with “freemium” or “teaser” content. And the hunting and
probing and testing of ways to make money from their news products continues. We’ve seen
some papers go digital-only and reduce their print runs. And we’ve seen a lot of free
websites and blogs from digital-only publishers fall on hard times, once their offerings get a
bit stale or face competition.
Meanwhile, in the print world, the San Francisco Chronicle dumped its paywall over the
summer. And just recently, the Dallas Morning News decided to drop its paywall and instead
offer both a free and paid, premium site for those who really want that kind of content from
the Dallas Morning News. I believe the Boston Globe also has two sites, one free and one for
paying customers, though who knows if John Henry [an investor who owns The Boston
Globe, Boston Red Sox and Liverpool Football Club] will continue that.
Eating your lunch?
The biggest problem right now is there are no real rules. If you go with a free or ad-
supported model, you risk chop shops like the Huffington Post eating your lunch. If you
charge for your content, you better have something folks can’t find somewhere else or place
enough value on to pay for. If you’ve flip-flopped over the years, you probably have – at
some point – confused your customers about your value proposition. I like that Mr. Murdoch
and Robert Thomson saw the value of keeping our news behind a paywall when News Corp
took us over. News is, after all, a business. And that’s also why I have high hopes that, with
the entry of other savvy entrepreneurs like Henry and Jeff Bezos, we’ll see sustainable
models that consistently build up readership and revenue. It’s about time for that to happen
in our industry.
What is the most important lesson WSJ has learned since putting up its paywall?
There have been many important lessons learned over the years, but I’d have to say one
key lesson is to be honest with and fair to your subscribers. News – great, Pulitzer Prize-
winning news, investigative news, important and timely insight into an IPO or a company’s
death spiral – costs money to produce. We’ve never pretended that it doesn’t. Sure, lots of
sites on the web have news. Some also have rumors masquerading as news, news lifted
second or third-hand or coming from parts unknown. And it’s all free! Imagine that! Go
ahead and read as much as you want. But when you really need to know something in a
timely fashion, if you need it verified 100 per cent, many readers know they have to have a
publication they trust. I’d say our growing subscriber numbers over the years are testament
to our living up to the pact to deliver what they want and need.
In the same vein, you also have to be fair and predictable in how you build and implement
your paywall. Some publications, like the New York Times, use a metering system, and I
guess that works for them. After a certain number of free articles, you get a screen telling
you you’ve hit your limit and that you’ll need to subscribe to read more of their reporters’
work. We put some select content in front of the paywall and “key” what we deem valuable
content, giving everyone the headline and maybe a lede or second sentence, but limiting the
full article to paying customers and offering non-subscribers the opportunity to become one
of the family if they click on a “keyed” article. We try to be consistent with how we treat our
online content, so that subscribers, over time, have come to know what to expect. The worst
thing you can do is to unpleasantly surprise your subscribers. That risks alienating them.
A report from the World Association of Newspapers concludes that
publishers “did not learn from the rise of other pure digital players and took far
too much time to understand this [paid content] opportunity. And one could only
regret that the essential driver for taking action has been losing revenue on core
print business.” Would you agree with this?
I can’t speak for other publications, but let’s be honest. When you have a choice between
selling a full-page color newspaper ad for the price of a small house in the U.S. Midwest or
trying to grind it out on the ground with CPM revenue, it’s always easier to keep going for
the big and easier money. Small, digital-only players never had print ads to rely on. They
entered into a hyper-competitive online environment and had to find innovative ways to
make money. Whether you like or loathe him, guys likeMichael Arrington [the founder of
TechCrunch] had to be extremely entrepreneurial and adaptive in a way that the ink-stained
wretches never did – or never thought they’d have to. And then print advertising started a
slide we’re still seeing, industry-wide. Digital ad revenue, though it’s growing, still requires a
lot more shoe leather to sell and many more clicks to come even close to making that up.
So, here we are. There’s no doubt many publishers have come very late to the digital and
paid-content party. And many are only there because they’re printing in red ink. But at least
they’re there and still publishing. My hope is that they are able to step back and view this as
an opportunity. So far, a lot haven’t. Instead of seeing this as a chance to invest in a new
business, to double-down and add value in ways that digital subscribers are willing to pay
for, a lot of publishers are cutting reporters and editors, shrinking their newsrooms and
hampering their ability to cover news in new and innovative ways. They’re hiring web editors
and young multimedia reporters, and that’s a good thing. But so many newsrooms I know
around the U.S. have been gutted of seasoned editors and reporters, gifted storytellers and
relentless diggers, that even as they regroup, that talent is never coming back. I worry that
a rush by some publishers to slash costs means they won’t be able to offer a high-quality,
paid online product.
That’s the doom-and-gloom scenario, but I’m actually an optimist. I’ve been a journalist for
nearly 25 years, and this industry has been dying since before I even wrote my first story.
It’s the longest death spiral in history. We whine and wring our hands a lot, and there’s no
doubt the news business is suffering. But tell me something: If things are so bad, why is
Warren Buffett buying newspapers? Why did John Henry buy the Boston Globe? Why does
Jeff Bezos have the keys to the Washington Post? And for that matter, why did Rupert
Murdoch buy a 120-year-old newspaper? These are all smart guys. They smell opportunity
and know that with a great product, with innovation, a new approach, a better business
model, you’re going to make money. I hope we look back at this period one day and refer to
it as one of “creative destruction,” if I can take some liberties with Joseph Schumpeter‘s
concept. Or maybe we’re just witnessing a much-needed changing of the guard.
I’m not saying it’s easy to make money in the digital world. News is tough, both because
folks are so used to getting online news for free that they place no value on it and because it
costs a lot of money to provide good, well-written, interesting and reliable news. I think
these smart, innovative guys who have become the new Hearsts and McClatchys just need
time and they’ll find a business model or models that work.
How have paywalls changed the way journalists write the introductions to their
stories, if at all?
I’m not sure exactly what you’re asking or why, but a paywall hasn’t changed things at The
Wall Street Journal. Sure, web editors pay attention to the H1 and H2 fields and want our
headlines more SEO-friendly, and we think about metadata and key words, but our reporters
still pitch stories the same way, report them the same way and write them the same way.
You may see more flagging of great – and paid – stories via our blogs, but we don’t hold
things back in either headlines or story tops. If anything, we hope a great headline and
significant lede will make readers who are seeing our “keyed” news want to subscribe.
I have seen other publications and sites try to add sex and glamour to their web offerings
and others go more dry and factual to ensure a solid ranking on search engines, to attract
more eyeballs or to convince more people to subscribe, but we simply haven’t done any of
that in our shop.
Are there certain types of content that people will and will not pay for?
If you look at our Dow Jones product offerings, you’ll see something interesting. We think as
much about the timeliness of news delivery as what content bucket a piece of news is in. Did
you know that professional traders make the bulk of their money in the first couple of
minutes after a piece of news breaks? That’s where we offer a higher-priced professional
digital news product. Depending on what the news is, paid subscribers of WSJ.com will find
much of the same news on our site slightly to somewhat later – we’re talking mostly
minutes. And we find that people are willing to pay — sometimes for both — knowing that
we offer a lot of other things on WSJ.com, including photos, multimedia, graphics, lifestyle
piece, blogs, sports and the like. And of course, many of those same people buy or read the
print newspaper the following day and find still more interesting things they didn’t know, as
they sit at the breakfast table or head into work on the train. Globally, we have newsrooms
that provide all kinds of news to all our platforms.
To answer your question more directly, we know from the success of purveyors of
pornography, betting and gambling sites, music sites, movie and TV sites, niche and
enthusiast publications and some subscription sports sites, like MLB.tv, that people are quite
willing to spend on vices, obsessions, passions and entertainment.
News, as we know it, is always going to be somewhat of a harder sale. For many, because
they’re used to publications offering it for free online, they place no value on it. And while
you can listen to your Miley Cyrus song 1,000 times or watch Mission Impossible as often as
you like, a news story often ends up on the bottom of a digital bird cage, sometimes just
minutes after it comes out. So how do you get folks to place value on your news and pay for
I think our strategy of segmenting news by timeliness is fantastic for ensuring maximum
value. I also think a prestigious publication like the Journal has other things of value, for
which subscribers will be willing to pay. That includes exclusive content, stories and videos
and other multimedia that offer virtual access to people and places most subscribers,
themselves, would not be able to get and helpful, unbiased and expert guidance in areas,
such as real-estate purchases and personal finance.
In the future, will more or less content be paid for by those who consume it?
I’m mindful that I’m not Alvin Toffler [writer, futurist and former associate editor of Fortune
magazine], and I have this nightmare of someone sticking your article in my face 20 years
from now, when I’m sitting in a retirement home or standing in a breadline and reminding
me of my vainglorious prognostications.
But I’d have to say – no, I have to hope – that it will be more. If there’s no money in
journalism’s future, why are some of the biggest tycoons in the world, folks with really no
prior journalism experience, jumping into a dying business? Businessmen like John Henry
and Jeff Bezos may be philanthropic, but these are for-profit businesses for which they paid
serious cash money. They’re not corporate raiders. There are no bones to pick clean in the
newsrooms they bought, no more debt they can load news companies up with. And forget
our underfunded pension funds.
I’m no businessman, but I am an avid consumer, and there are some things I will not pay
for. Commoditized news is one of them. To me, for a news provider to survive online, you
need multiple revenue streams. You need CPM money and sponsorship of different kinds of
content. Events, TV deals, custom content are also good ideas. But at your core, the key
things for a viable paid-content business are to have a brand and a news product that
people place value on and an electronic subscription or micropyament service in place that
makes it as easy and seamless for paid consumption as possible. It works for Spotify and
iTunes and the Google Play store. Why not for news?
Everything has a price. We have a subscription price that’s quite fair. If you think a news
provider should start charging by the article – and I’m just speaking generally here, not
about the Journal – I don’t know if the price for a single news story is a penny an article, or
five cents. Is it a dollar for a scoop? What if a piece of news could make you millions if you
got it faster than readers of Yahoo! News. Do you see where I’m going with this?
October 4th, 2013 at 11:26 am