If Rupert Murdoch does make the online Wall Street Journal free there are a number of things to consider that would happen from the decision.
The first is a subscription versus an ad-supported model. What a subscription model does is offer a predictable stream of income that can be counted on over a period of time. For ad-supported content, it will be much more cyclical as the industry has always opporated that way.
Murdoch and News Corp. (NWS-A) can of course afford to allow that to happen if it results in a much higher viewership, which eventually would overcome dropping the subscription model. Most estimate that it would take about two to three times as many viewers to make up for abandoning the subscription revenue model.
If the Wall Street Journal ends up being free online, it will draw very quickly a huge audience. Now it includes just under 1 million subscribers, they would definitely stay with the publication, but many more would quickly move from the existing large financial portals of Yahoo! Finance (YHOO), MSN Money (MSFT) and AOL Money (TWX). They just don't have near the financial and business branding that the Journal has.
The question I have is who would these new visitors be? Will the more general readers dilute the current ad rates the online Journal commands which are far higher per page view than many other large media sites? It seems there's going to be a move to make it more attractive to general readers through having a stronger news element in the paper.
That will increase scale, but also dilute the type of reader it attracts. In other words it won't be quite as niche as it used to be.
Not too many businesses could successfully get away with doing this, but Murdoch probably will, as business readers also have a strong desire for worldwide news as well, so it should integrate good with the exciting publication.
One thing to keep in mind in reference to Rupert Murdoch is he does like scale, and knows how to reach it. He also is an expert at building ad-supported models. One way or the other, he is going to get a lot more out of the Journal than just about anybody else on the planet could get.
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