Yesterday, I clambered back up on my soapbox (yes, again) to declaim against Rupert Murdoch's snipping the price tag on Dow Jones'
Guess who got tasked with figuring that out ...
The final answer
Yes, me. Unfortunately, the plain and simple answer is that I don't know the answer. I've just finished combing through Dow Jones's most recent 10-K, and maybe my eyes are going, but I'll be darned if I could find a line entry stating plainly: "This is how much we make on print Journal subscriptions."
The tentative answer
But I can guess. According to its 10-K, Dow Jones averaged a print Journal circulation of 1,733,000 in 2006. 6.7% of those were sold at newsstands at the full, $1.50-a-pop price. The rest moved at various discounted prices. So what kind of money are we talking about here?
- 0.067 x 1,733,000 x $1.50 x about 300 (business days in a year) = $52 million
- 0.933 x 1,733,000 x $149 (the cheapest annual price yours Fool-y has received in the mail) = $241 million.
Add 'em up, and my best guess is that Murdoch's move to a free WSJ.com site potentially puts about $300 million in subscription revenue at risk. If, say, one skinflint in three decides to stop paying for print versions of articles that become free on line, then Murdoch is going to have to make up $200 million ($100 million in the above lost print sales plus $100 million in lost online subscriptions) just to break even on this harebrained idea.
Now admittedly, Murdoch aims to take a page from the playbooks of Google
But still, $200 million? That's a heckuvalot of ad clicks.
Follow along as we parse the logic of this business model-shattering news in: