JOIN USIndeed, the newspaper started charging readers for access to its website in 2002. Now, with few signs that advertising is rebounding from a deep slump, and with other publishers moving to imitate FT.com by erecting so-called pay walls, Ridding feels vindicated.
“It was pretty lonely out there for a while in paid land,” he said last week. “But it has become pretty clear that advertising alone is not going to sustain online business models. Quality journalism has to be paid for.”
Now ‘The Financial Times’ is adding to its paid-content strategy with a plan to accept micropayments for individual articles, as an alternative to a subscription.
And one by one, other publishers are starting to see wisdom in the paper’s ways. Rupert Murdoch, chief executive of the News Corporation, said this month that the company intended to charge for all its news websites. That plan would have the company’s major newspapers in the United States, Britain and Australia joining their sister newspaper, ‘The Wall Street Journal’, which already charges for access to most of its site.
Executives of ‘The New York Times’ have said they are considering ways to get readers to pay for online access, though they have yet to disclose specific plans.
That is a big change from 2007, when ‘The Times’ site abandoned a pay wall for some content, concluding that it was restricting the potential for online
advertising, despite the site’s having attracted 2,27,000 paying customers.
Around the same time, Murdoch was saying publicly that he might drop the pay wall around the website of ‘The Wall Street Journal’, which the News Corporation was in the process of acquiring.
With luxury goods companies, banks and other advertisers cutting back in this economic recession, ad revenue has fallen sharply at ‘The Financial Times’, as it has at other papers. Pearson, the London-based publisher that owns the paper, does not break out separate figures for it, but analysts say its ad revenue is probably down at least 20 per cent compared with last year.
Pearson said last month that operating profit at FT Publishing, the unit that includes ‘The Financial Times’, had fallen 40 per cent in the first half of the year, with revenue down 13 per cent.
Impact on print edition
The print circulation has also fallen, with sales in June down seven per cent from a year earlier, to about 4,12,000 copies, according to the Audit Bureau of Circulations in Britain.
FT.com has not attracted a huge paying audience, with about 1,17,000 worldwide, up from 1,01,000 in 2007. That is far short of the one million paying customers of ‘The Journal’s website.
Yet FT.com is lucrative because it charges a premium for its content. A premium subscription to the website, with access to all content, costs $300 a year in the United States. Adding the print version costs $100 more.
Because of rate increases by FT.com, revenue from web subscriptions has risen 30 per cent over the last year, Ridding said. ‘The Financial Times’ has also raised the price of its print editions.
In another effort to generate additional digital revenue, the newspaper restricted access last year to its content through databases like Factiva and LexisNexis, requiring users to buy special licenses to read archived articles. More than 600 corporate customers, with a total of about 50,000 users, have done so.
The price of a subscription to the databases “wasn’t reflecting the value of what we were producing,” Ridding said. “So we took control of the pricing,” he said, adding that the change led to “robust revenue growth.”
Also last year, ‘The Financial Times’ acquired Money-Media, an online provider of news for fund managers that charges a subscription fee. Last week, it acquired MandateWire, a digital provider of news on the pension fund business.
The newspaper also recently started an online newsletter for investors in China, called China Confidential, which costs $4,138 a year.
The growth of paid online services under the ‘Financial Times’ banner shows that the paper was right to maintain pay walls at a time when other media companies were yielding to the Silicon Valley mantra that “information wants to be free,” said Tim Luckhurst, a journalism professor at the University of Kent in Britain and a former editor of ‘The Scotsman’.
“It has proved, in one niche at least, that editorial journalistic endeavour does create value,” he said.