Charging for news content online may be a tough sell, but for financial publications that have a stable of institutional subscriptions, it's a bit easier. That's one of the reasons that The Financial Times is setting optimistic predictions for the new year.
After raising print subscription rates last year, the FT grew its online subscriber base 30% and saw an increase in corporate clients. Beyond that, the paper is set to see content revenues overtake print advertising revenue for the first time this year.
FT Group CEO John Ridding tells The Guardian:
“In some of the key areas we are at a crucial stage of transformation, so that we reckon next [this] year will be the first year that revenues from content overtake revenues from print advertising. The way things are evolving, content revenues should overtake all advertising revenues by 2012.”
Of course, the FT can't serve as a role model for all daily publications. Like the Wall Street Journal, the FT has specialist financial content that subscribers are willing to pay for to stay competitive in their fields. But the dirty little secret with financial news is the financial institutions that purchase bulk subscriptions. Companies buying employees papers are less sensitive to subtle price shifts than individuals spending their own money.
But both The Wall Street Journal at FT have been smart about how they charge for content. The FT does not charge for all its news, but rather lets casual readers get a taste of a few full articles for free each month. But the company charges those who want to come back for more, and has restricted access to archived content, meaning that the smaller number of people who put a premium on older data have to buy a license to access it.
It's that premium financial data that helps FT get by. Says Ridding:
"It's easier for us, I don't deny that. But equally, I don't think anyone can afford to dismiss the idea of developing paid-for content because journalism is valuable. It is significant in that it is reaffirming there is life beyond advertising for online publishing ... it does offer an alternative where an alternative was regarded for a long time as not existing."
But specialist data makes the transition away from advertising much smoother. It's also good news that FT is bringing in so much additional revenue from subscription increases as advertising venues seem less stable. And good fodder for rumors circulating that Mike Bloomberg is interested in purchasing the paper.
Another Guardian article today posits that Pearson publishing could be looking to sell The FT to Bloomberg, who recently purchased Business Week and could be looking to strengthen his financial news holdings. That deal is estimated to be around 1.5 billion pounds.
In addition to the Financial Times, the FT Group owns a 62% stake in Interactive Data Corp., a provider of financial data to institutions and retail investors and operates various other publications, including a 50% stake in The Economist.
Many publications are looking for new revenue streams and the financial data that FT Group sells could come in very handy in that area. For general interest publications, diversifying revenue streams is not so easy.