Interesting article this AM in the NYT about the FT (love all the acronyms), entitled “Financial Times Feels Vindicated by Web Strategy“. The headline is a little bit of a misnomer. The focus of the article is less on the web strategy and more on the fact that the FT.com charges for access on the web.
I’m not going to get into the should-we-charge-or-shouldn’t-we debate, but it’s interesting to note that there has been very little organic growth in FT online subscriptions and revenue growth from this division is up 30% mainly off of rate increases. What it means is that the FT is getting more efficient at extracting revenues from existing subscribers.
It makes sense why — of the 100,000 + online subscribers, many of them are businessmen and financial people sitting in London with business subscriptions. They’re not substituting out their FT sub to another periodical nor are they merely letting it expire without renewal. They feel they need this content and as the numbers show, are willing to continue paying up for it.
Another interesting development is the FT’s decision to better monetize its archives. From the article:
In another effort to generate additional digital revenue, The FT restricted access last year to its content via 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,” Mr. Ridding [CEO of the Financial Times] said. “So we took control of the pricing,” he said, adding that the change had led to “robust revenue growth.”
Again, here we see the readiness of 600 or so business entities, with over 50,000 total users, choosing to pay for a subscription to Lexis Nexis or Factiva to continue to access FT content. These are captured clients — ones whom value the services and will continue to pay up.
FT is creating new paid products as well. Things like an online newsletter for investors in China, called China Confidential, which costs £2,500, or $4,138, a year.
The NYT quotes Tim Luckhurst, a journalism professor at the University of Kent in England and a former editor of The Scotsman as saying “It has proved, in one niche at least, that editorial journalistic endeavor does create value.” It’s true — the value proposition for financial journalism does differ than general news and politics. If you can make me better at making money, it’s an easy sale.