Juan Antonio Giner of Innovation Media Consulting writes about how the Financial Times has changed its business model.
Giner writes, “A pioneer in paid online content, the FT continues to claim one of the most successful digital subscription offerings in the industry. As of April 2014, the paper boasted over 415,000 paying subscribers to its online and mobile offerings, a 31 percent year-on-year increase. In 2013 alone, it added 99,000 newcomers.
“The FT’s digital subscribers, which represent 63 percent of all subscribers, are quickly moving to mobile, with 62 percent of total subscriber consumption and 45 percent of total digital traffic coming from portable devices, complemented by a 20 percent increase in mobile advertising income.
“Like The New York Times, the FT has seen a rapid reversal in the traditional dominance of advertising revenues. As of June 2013, income from subscribers topped advertising revenues, reaching 63 percent in Q1 of 2014 vs. 48 percent in 2008, whereas advertising revenues in the same period were at 37 percent vs. 52 percent in 2008.
“FT CEO John Ridding, commented on this reversal in March 2014, telling The Media Briefing, ‘It is healthy to derive your main revenue from the content you produce. Advertising is a wonderful and valuable addition to that, but the direct relationship has to be between the publisher and the reader of content.’ Ridding expressed his interest to keep the FT out of the ‘volume game,’ one that many publishers, in his opinion, think they can play but that in reality is dominated by digital natives such as Google and Facebook.
“Ridding is using this subscriber philosophy to drive the FT’s digital revenues. Total intake from digital revenues surpassed those of print, reaching 55 percent vs. 31 percent in 2008 and up 13 percent since 2012. The trend continues on an upward slope, with average revenue per user increasing 1 percent in Q1 2014 to £237.50 and top subscribers paying north of £700 annually.”
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