Financial Times Editor Lionel Barber covered a wide swath of ground in the nearly 5,000 words of his Hugh Cudlipp Lecture. Much is what you might expect from the editorial leader of the FT: paywalls, good. WikiLeaks matters. Phone hacking, bad. BBC, about time it was heavily trimmed. BSkyB-News Corp (NSDQ: NWS). “troublesome.” His take on Rupert Murdoch, not quite an epitaph but a sign of the nicer bits you might hear one day: “Rupert Murdoch remains one of the leading innovators in the news business. His drive to establish a new paid-for culture in the UK digital business deserves applause.”
The full text is here. The section about the FT‘s digital and pay strategy, an editor’s view of the business of journalism, is excerpted below:
Overall, the challenge for all news organisations is to exploit the power of the brand across all platforms, from print to digital. The FT’s strategy can be summed up in five points.
First, we doubled the price of the newspaper on the retail stand in Britain and raised cover prices elsewhere around the world. The price hike had little impact on sales, but generated substantial extra revenue. More important, it sent a powerful signal to the market and to our own journalists that the FT was a premium product.
Second, we rapidly developed our subscription business, both digitally on ft.com and in newspaper form. That way we reduced our dependence on the casual purchaser in favour of the loyal subscriber. Coincidentally, we shifted the terms of debate here in the UK away from the febrile confines of the monthly ABC (NYSE: DIS) circulation figures to a broader and more meaningful definition of audience, based on both print and digital consumers.
Third, we swung firmly behind the principle of charging for content. At the height of the dotcom bubble, we havered between charging for business news while offering general news for free. In practice, the distinction, at least for FT readers, was meaningless. So we came up with an ingenious compromise.
From 2007, we started charging for content based on a meter model. Users would be given a limited number of free articles to entice them into first registering and later signing up for subscription.
Four years on, the meter model has proved to be an industry pioneer and an unequivocal success. FT.com now has more than 3.2m registered users and more than 200,000 paid subscribers. Other publications, including the New York Times (NYSE: NYT), are now adopting or about to adopt similar meter models.
Fourth, we abandoned or revised arrangements which allowed other news providers or aggregators to sell our content to third parties in return for a fee. In future, we determined, we would sell direct to our customers. And we would aggressively pursue any party seeking through cookies or sharing of password to gain access to our content for free. Yes, believe it or not, some people do still think there is free lunch with the FT.
Fifth and finally, we made significant changes in the newsroom which complemented our commercial strategy.
Back in 1999, the FT pioneered the concept of the integrated newsroom. We put all web journalists on the same contracts as print colleagues. And we required all journalists to work both for the print and digital channels. More than a decade later, we have a fully flexible and integrated news operation in which reporters and editors work seamlessly in print and online.
These changes have put us in the best possible position to develop new niches, with more depth and focus to attract new audiences such as FT Alphaville, our award-winning financial blog or FT Tilt, our new emerging markets service, or our prizewinning iPad application which has brought in extra revenue and subscriptions. And, incidentally, I believe the tablet is the most exciting technological development in recent years, a game-changer because it has all the feel of a newspaper and the advantages of being a dynamic interactive device.
Let me be very clear: The FT approach does not necessarily lend itself to being adopted by others. We have a distinct advantage because we are both a high-end niche product but with weight, global reach, and tradition.
We live in a time of great experimentation. There are no universal media models, let alone silver-tipped bullets. Each news organisation must determine how to distinguish itself in an increasingly fragmented market, where the consumer is far more discerning and powerful than ever before.
Technology cuts both ways. It allows third parties and journalists to slice and dice content to better fit the demands of the consumer. Technology allows the use of content to be measured according to traffic generated. This in turn means journalistic supply and, crucially, demand can be measured in real time.
In theory, these advances threaten to undermine the traditional role of journalist as gatekeeper and arbiter of what constitutes news. In practice, the pass has already been sold. The question is what are the new terms of engagement, the new balance of power between the mainstream journalist and other non-traditional aggregators of news, analysis and commentary?
Now there may be some in the audience who find it surprising for a newspaper editor to dwell so long on the business side of the news business. But in my judgement newspaper editors need to be actively involved in strategic decisions affecting the business. Many on the commercial side would appear to agree.
In the past decade or more, many journalists with a background in business journalism have gone on to be national newspaper editors. Peter Stothard and Patience Wheatcroft, my old colleagues from the Sunday Times Business News section, as well as James Harding, Will Lewis and Robert Thomson from the Financial Times. I am tempted to suggest that the FT should henceforth be renamed the GE School of Journalism given the number of first-rate former FT journalists now occupying the commanding heights of British journalism.
Of course, there will always be thick red lines between editorial and commercial. We at the FT are more than mindful of anything which could compromise the integrity of our journalism or our reputation, our most valuable asset.
The case for close co-operation remains unanswerable. In these revolutionary times, I am tempted to quote Benjamin Franklin on the signing of the Declaration of Independence. “We must all hang together or assuredly we will hang separately.”