The FT expects digital business to amount to 35% of total revenues in 2012 with its managing director Rob Grimshaw likening the business to an online retailer, as opposed to a traditional content publisher, as it focuses on premium sales and less on advertising.
The FT announced last week that in the first half of 2012 its digital subscriptions surpassed its print ones and its average daily global audience grew to close to 2.1m, with the number of people accessing its content on more than one channel rising 27% year on year.
In the first of a two-part interview, the title’s managing director Rob Grimshaw explained to new media age how the FT began the transition from print to digital and the challenges involved in such a business and culture shift.
“We thought we’d undersold our content historically. We had been able to do that [historically] as advertising was an excellent business for us but we saw a weakness in the ad market long term” Rob Grimshaw
How has a traditional media brand like the FT put digital at the core of its proposition?
That is the big question, obviously we’re very pleased with what we’ve been doing so far, with revenues going up by 77% across the whole FT group and digital subscriptions [to FT.com] up by 31% year-on-year.
It’s a great milestone that we’ve reached with 300,000 digital subscribers now outnumbering our print circulation and it’s good that we’re one of the first major publications to reach that.
That hasn’t happened by accident, it’s been the result of a determined push to really reshape the business that’s been going on for about four-to-five years now. This has been important to thrive in a digital world or as I would put it, a multi-channel one, we’re certainly not about to drop our print publication.
What was the first step in achieving this?
We set out about five years ago with two objectives in mind, the first being getting the balance right between print and digital. We knew our print business was going to shrink, so we put in place to grow our digital revenue.
This year we expect about 35% of our total revenues for the whole of the FT will come from digital sources, so we’ve made tremendous progress.
The second objective we started off with was to reduce the reliance on advertising revenues and increase the revenues we made from content, especially for digital.
How is the FT diversifying its revenue stream?
We already have a strong and growing conferences business and that’s helping to diversify our revenue stream but our big focus has been to drive revenue from the content.
We thought we’d undersold our content historically. We had been able to do that [historically] as advertising was an excellent business for us but we saw a weakness in the ad market long term.
Structural changes in the digital advertising market, such as challenges from search [engines] and other sources, made us feel that the smart strategic play would be to was to rebalance the business towards content revenues.
Where else has the FT focused on to achieve this?
We’ve had to invest very heavily in our technology and completely rebuilt the publishing platform for FT.com, redesign the site, migrate all of our content online and particularly for mobile. That included the launch of the web app [which was the result of the FT’s high-profile fall out with Apple] and that has been tremendously successful.
We’ve also tried to follow the audience and where possible stay ahead of them for the distribution and presentation of the content. Then we focussed on putting a new business model [the FT’s tiered access model] around that which we think is very well suited to the digital channel.
For instance, we have 4.8m registered users as well as the 300,000 digital subscribers and this has given us a tremendous insight into what our readers like, such as how they like to consumer our content.
This has helped us optimse our marketing and make our entire operations much more effective. This has also helped us realise how you run a successful online retail business, which is what we are effectively doing now. We sell subscriptions. I think where we have led, you’re starting to see many other publishers start to follow.