How Financial Times Defies the Times

Famed Pink Broadsheet in the Black by Raising Price, Charging for Web

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LONDON ( -- The Financial Times is charging more for copies of its salmon-colored daily broadsheet and is making readers pay for its online content as well -- not exactly recessionary measures in the toughest times ever for the newspaper industry.

The Financial Times Group has bucked the newspaper trend, with 2008 profit up 13%. The robust performance saw owner Pearson's shares rise on a day when the U.K. stock market plunged to a six-year low. Not that the Financial Times is immune to an ailing global economy: Its ad revenue and newspaper readership both fell 3% in 2008, while management recently announced 80 layoffs and introduced the option of a three-day week over the summer to help cut costs.

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But circulation revenue was up 16%, thanks mostly to a dramatic cover-price rise from £1 ($1.42) to £1.80 ($2.55) in the space of 18 months. And the 3% ad-revenue drop was minimal compared with those of some rivals that recorded 30% falls at the start of this year.

Perhaps most significantly of all for the long term, people must pay to view Financial Times content on the web. In 2008, the number of digital subscribers was up 8% to 109,609. On top of that, claims 1 million registered users, with 7.2 million unique users in 2008 (up 27%) and 49.2 million page views (up 68%). Daily newspaper circulation is 432,944, and worldwide readership is 1.3 million.

'Religious issue'
Charging for content on the web goes against the doctrine that information yearns to be free -- and supported solely by ads. "We've taken a lot of flak," said Rob Grimshaw, managing director of "People have a funny attitude on the subject. Some people associated with the internet see it almost as a religious issue. They take great exception to putting content behind a veil.

"Internally, we always believed we were doing the right thing," he continued. "Our main product is content, and we wouldn't feel comfortable in a world where we couldn't sell our main product."

The site, which has Asia, U.S., Middle East, U.K. and Europe versions as well as a Chinese-language site, allows limited access to non-subscribers, who can see up to three articles a month for free. After that, the browsers need to register, and for more than 10 articles a month, a paid subscription is necessary.

The standard subscription has recently been increased to £149 ($210) from £99 ($140), as the emphasis moves toward subscriptions to drive revenue in a weak advertising market.

The newspaper is based in the U.K., but 70% of its audience is overseas. Its web traffic is 40% from the U.K., 30% from the U.S., 20% from Europe and 10% from Asia.

Not chasing volume
Of course, the Financial Times has been helped in its staunch adherence to charging for content by the fact that it is essentially a niche proposition. It's aimed at global business decision makers and since there are never going to be more than a couple of million of them, there was never going to be any question of chasing volume.

"I've heard of some scary stuff going on [at rivals], with CPMs as low as 10¢," Mr. Grimshaw said. "At those rates, you need a lot of page views to make any money at all. There's a lot of what I call plain-vanilla inventory out there with only the [cost per thousand page impressions] to distinguish one site from another, which has pushed CPM through the floor. A lot of publishers and portals have pursued volume over other things.", meanwhile, has focused on targeting technology and is still getting premium advertising from the financial-services sector, as well as luxury brands such as Rolex.

Vanessa Clifford, head of press at Mindshare U.K., said, "The Financial Times represents high-quality journalism. It is a very strong brand that has built up over many years, and they can command a premium for it. When budgets contract, advertisers stick with the trusted titles."

U.S. papers seek more circ revenue

The Financial Times isn't alone in increasing pricing, but it does charge more than its principal American competitors. The New York Times raised its metro weekday price to $1.50 from $1.25 last summer, and The Wall Street Journal upped its cover price to $2 from $1.50 around the same time. Both are increasing home-delivery charges, too.

The Journal also has online revenue to brag about. Although News Corp. chief Rupert Murdoch initially suggested he'd like to take down the online pay wall, he changed his mind once in possession of the paper and adopted a hybrid of free and paid content. Last fall the Journal did away with a long-running $99 introductory offer for the print and online editions; that combination now costs $181.

The Financial Times is also expanding its circulation revenue more quickly than The New York Times or the Journal. The Times Media Group recently reported increasing circulation revenue 3.4% in 2008, despite losing 3.6% of Times weekday circulation in the most recent reporting period. The Journal said its fourth-quarter revenue jumped 9% from the same quarter a year earlier; its circulation held steady in the most-recent period.

The New York Times, of course, had tried cordoning its columnists and other "premium" online content behind a wall called Times Select, which was free to print subscribers and cost everyone else $49.95 a year or $7.95 a month. It got about 227,000 people to pay for online-only memberships, generating some $10 million in new revenue. But in September 2007 the company ended the experiment, deciding the revenue wasn't enough to offset the traffic and visibility the site was losing.

In another sign of circulation revenue's growing importance, the Journal recently argued loudly against an article in The New York Times that suggested the Journal was heavily discounting its prices to gain circulation.

-- Nat Ives

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