Inside Word: In Praise Of The Financial Times’ Online Pay Model

The Inside Word is a weekly feature that looks at compelling industry debates and discussions unfolding on the blogs of employees at digital-media companies.

Poster: Fred Wilson

Position: Managing partner, Union Square Ventures

Blog name: A VC

Backstory: As newspapers struggle to make money online, The Financial Times offers one model: The paper lets anyone access three articles every 30 days for free or, if they register, 10 articles a month for free — but then prompts them to sign up for one of two paid-subscription options if they want to see more.

Blog post: Wilson argues in a blog post that it’s an ideal model because it monetizes the audience — and not the content. “This model recognizes a few fundamental facts about the internet. First, you need to make your content available for search engines and social-media linking. That drives as much as half or more of the visits these days. And if you have an ad model at all, and most newspapers do, then you need those visits and that audience,” he writes.

“The other thing I like about the FT‘s model is that it’s an elegant implementation of ‘freemium.’ The best freemium models allow anyone to use the service for free and then convert the most serious/frequent/power users to paying customers.” The blog post sparked a lively conversation, even by A VC‘s standards, with more than 250 comments.

Post-script: We asked Wilson about the WSJ model, which offers a good chunk of the content for free but charges a subscription for access to the full package, including the WSJ’s prized economics and markets coverage. He said it wasn’t ideal because it isn’t “simple and elegant’ like the FT‘s setup. As for the NYT, which is considering some sort of subscription model, Wilson writes in the comments to his post that he was not a fan of the paper’s previous Times Select option, because like WSJ, it charged for some content and offered other slices for free. “I believe they have a brand and an audience that values their content enough that a good percentage will pay,” he writes. “The trick is how to implement it. I never paid for Times Select because I was insulted by the idea that you had to pay for opinion but not news.”

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