Rupert Murdoch paid a hefty premium (a 65% premium, in fact) to secure the Wall Street Journal.  As someone who has always been traditionally viewed as an outsider (although, probably not for some time now), this must be one tasty win, best relished with a cold beverage (I don’t really know what kind of cold beverage billionaires drink, but I assume they still enjoy cold beverages).  While the Free vs. Fee debate rages on with an interesting article in Businessweek, my opinion about the matter as it refers to the Wall Street Journal is taking on a decidedly “it doesn’t matter” kind of stance. 

And this is because, in situations like this, I suspect that it isn’t always about the bottom line.  Read the Businessweek article if you wish.  There are loads of interesting suppositions and educated theories about how revenues will run if the WSJ is made free.  Namely that the WSJ makes about 65M in subscription fees, plus another 75M in advertising fees.  That they can command a higher rate card because of the demographic that enjoys the WSJ.  That they might still command a higher rate card in the face of going free (and diluting their demographic), but could see a jump in traffic by as much as 10 times.  Or, as one analyst puts it:  maybe it will result in a net 29M loss for the first few years.

At the end of the day, we’ll only know about the numbers once it happens, if it happens.  I think, however, that Rupert Murdoch doesn’t really care.  Why?  Well, he’s said on a few occasions that his plans with the WSJ involve expanding and growing the WSJ brand into a global entity.  In fact, the Bancroft family, whose own infighting and bickering may have led to a premature sale of the WSJ, had similar plans, which, under Mr. Murdoch, now may involve expanding into international news and non-business news. 

If this the case, then whether or not the WSJ makes money as it is free or not is really immaterial, and in fact, may simply be the cost of doing business as the WSJ begins to grow and expand into a different animal altogether.  Because I think if the WSJ *does* plan to expand I think it must necessarily *be* free as an incontrovertible condition to its growth.  Its absurd to believe that the kind of vision that Murdoch might have for the WSJ would be possible *without* it being free at some point.  And certainly it seems to make the most sense while it is ramping up in a growth-type period.

Profitability is one thing.  One the other hand, with the type of premium Murdoch paid to get his paws on the Wall Street Journal, one could almost see that he has bigger plans for it than to merely view it as a profit or loss vehicle.  And if that’s the case, perhaps the debate around profitability as a reason for making it free or not is a moot one — perhaps, again, fueling the “free” side of the debate as something that is not only probable, but necessary for its future plans.

With the news that the WSJ has essentially been all but sold to Rupert Murdoch and News Corp, there has been a resurrection of some conversation around the paywall around the WSJ.  Namely, that it might – or perhaps, should — be taken down.  This isn’t just the fever dream of cheap would-be media wonks (such as myself), but as Mat Ingram rightly points out, this is something that Rupert Murdoch himself mused out aloud to Time Magazine some months ago.

I understand and sympathize with the “make the online WSJ free” argument.  All things being equal I like free things too — and understand what kind of strategic benefits it might play out, both for its bottom line (although the numbers really have to be crunched out, and more than the helpful back-of-the envelope numbers courtesy of Fred Wilson) and the expansion of the WSJ brand.

The problem with a totally free paper, however, is that it becomes fully dependent on one of two things.  Advertising to bring in revenue, and the good graces of News Corp. to make up the shortfall if and when there is a deficit between what comes in through advertising, and what goes out (to pay for everything else).

That is, you suddenly become beholden not to your subscribers, but even *more* to your advertisers, or whomever makes up the shortfall.

For a company that is desperate to prove that its editorial content will be free of influence (and that’s exactly how their letter reads to the public), removing the paywall will only make things worse.  It will put a lot of psychological pressure from two angles, and it might even change the perception of their once paying public: well, its free now, but there’s a reason why its free, right?

And if that sentiment starts running rampant, there’s no amount of money in the world that will be able to shore up its brand reputation if the WSJ online is ever considered the lap dog of its advertisers or of News Corp at large.