Cover price rises, a growing online subscriber base and corporate clients will help the Financial Times’s content revenues overtake print advertising revenues for the first time this year.
Stoking the debate over paid news content and the survival of newspapers, the FT Group chief executive, John Ridding, says the landmark moment vindicates the FT’s strategy to charge. He has long advocated that other publishers should follow suit and abandon a “free is good” doctrine.
“In some of the key areas we are at a crucial stage of transformation, so that we reckon next [this] year will be the first year that revenues from content overtake revenues from print advertising,” he says. “The way things are evolving, content revenues should overtake all advertising revenues by 2012.”
When the FT embarked on a strategy of charging online and raising its cover price “people thought we were a bit strange”, recalls Ridding.
“But because of the decisions we took in 2006 in terms of changing the business models and developing content revenues, that has definitely strengthened us and made us in a stronger position than we would have been and than many of others are in,” he said.
FT circulation revenues rose in 2009, despite a drop year on year in print circulation and it says revenues from FT.com digital subscribers rose 30% over the year, as readership rose around the world mirroring a strong appetite for financial news during the economic downturn.
The FT Group, which benefits from an audience willing to pay for its specialist business stories and analysis, concedes that it is in a different position to many of its rivals. But Ridding insists that there is growth to be had by charging, even if just for some stories or columns.
“It’s easier for us, I don’t deny that. But equally, I don’t think anyone can afford to dismiss the idea of developing paid-for content because journalism is valuable,” he said.
Media expert Paul Lee at consultancy Deloitte stresses that a lot of the FT’s subscribers are businesses rather than individuals and so less sensitive to price rises. But the shift in balance between the newspaper’s content and advertising revenues is still significant for the rest of the industry, he says.
“It is significant in that it is reaffirming there is life beyond advertising for online publishing … it does offer an alternative where an alternative was regarded for a long time as not existing,” he adds.
“In 2010 the FT is likely to be an exception, but it does prove that advertising only for online is not the only model out there.”
As the FT seeks to take account of the changing way people read and pay for newspaper content, it has been working with auditors at Pricewaterhouse Coopers to come up with an average daily global audience, or readership, figure as well as a total daily paid-for circulation figure.
The newspaper group feels the current Audit Bureau of Circulations Electronic and print ABCs do not fulfil publisher or advertiser needs.
“In this changing media landscape, traditional ABCs are a little anachronistic when all readers are reading across all platforms,” says Ridding.
The group says the global readership figure is expected to be around the 2 million mark compared with the current 1.3m print readership figure. The number will be available quarterly and will incorporate *ABC* circulation, ABCe unique users, syndicated readership surveys by third party research companies and the FT’s own audited research based on samples of its user base.
The total daily paid-for circulation figure
This article originally appeared in Â© Guardian News & Media Ltd..