Conventional wisdom has it that traditional media are struggling for survival, trapped between the rock of cyclical downturn and the hard place of structural change, new technology and broken business models.
Reporting teams are being reduced in many newsrooms, especially in the U.S. Their journalism is being discounted and increasingly given away—in print and online—in an attempt to sustain audiences enticed by free news on the Internet. But print advertising dollars become Internet dimes. More cuts follow. And so a vicious circle closes.
It's a troubling picture, and painfully accurate in too many cases. As Craig Moffett, senior analyst at Bernstein Research, recently wrote in an excellent piece, titled “And Now for the News ... The Emperor Has No Clothes”: “The notion of a free press was meant to stand for something grander than this.”
And it can. In this case, at least, conventional wisdom isn't wise. A virtuous circle can avoid a downward spiral. And it is particularly relevant to b-to-b media.
The two principal factors in this, more positive perspective are confidence and investment in quality journalism and technology viewed as an opportunity as well as a threat.
It is extraordinary how confidence in the business of journalism has crumbled among its own constituents. We live in an information age and, with financial and economic uncertainty the greatest for a generation, the value of reliable, quality news and analysis should be clear. The flood of information—from portals to blogs—means readers are searching for trusted navigators.
Technology is clearly disruptive and has thrown a wrench into traditional business models. But it also provides new, cheaper and more dynamic channels of distribution for news organizations. In addition, it provides access to new sources of revenue. Video, for instance, has brought TV budgets into range for print media businesses with digital platforms.
At the Financial Times, we have systematically raised our prices over the past 18 months—by 50% in the U.K. In the U.S., we have doubled our cover price over the past two years to $2. This has enabled us to maintain sustained investment in our newsroom and new formats.
A series of editorial awards, including a clean sweep of the three major U.K. newspaper awards, seven prizes at the major Asian publishing awards recently and a growing U.S. trophy cabinet have provided editorial dividends. But the impact has also been positive on the bottom line, with stronger revenue and profits.
The paucity of complaints from readers has underlined their loyalty and their willingness to pay for quality journalism. We have built a global network of 500 of the best journalists in the business of business journalism. They have access to world business and political leaders, sending quality—and frequently exclusive—copy to our editing hubs in London, New York and Hong Kong, and publishing online and in print at 24 international sites. It is a big and complex operation, and it doesn't come cheap. But the daily FT still costs less than a double espresso from a coffee bar.
We have taken a similar approach to our corporate customers. We had been disaggregated by aggregators, bundling FT journalism with thousands of other sources and selling it too cheaply to corporate clients. So starting in April, we required corporate customers to buy a direct licence to receive FT content, aligning our pricing across consumer and digital channels.
Yes, that's right—pricing in consumer digital channels. Last year we launched a new “access” model that requires subscription to FT.com once a reader has read 30 articles in a month. This approach enables us to broaden our reach while moving dedicated readers to a deeper subscriber relationship.
This is one advantage of technology: the ability to segment audiences and price accordingly. There are many others. FT.com enables low-cost distribution. Digital technology also facilitates the development of targeted, niche, editorial formats such as Alphaville, our markets blog.
There is no cookie-cutter solution, nor should there be. Success depends increasingly on differentiation, not duplication. And that is why b-to-b media are well-positioned as compared with the “commodity” output of the general news media. There are, though, some general themes to this vision of a virtuous circle. The most important of them: If we the media don't have confidence in the value of our content, who will?
John Ridding is chief executive of Financial Times and FT.com.