Felix Salmon of Reuters writes about the high cost of subscribing to the Financial Times in comparison to The Wall Street Journal, the New York Times and other media.
Salmon writes, “What’s more, at least for readers in the US, the FT isn’t remotely comprehensive enough to suffice as a one-stop shop for business news. The FT has some fantastic content, but it needs to be read in addition to, rather than instead of, the NYT / WSJ / Reuters / Bloomberg. As a result, you need to be really price-insensitive to buy it: you can get access to all four of those sources online for less than the price of a single premium FT subscription. When a five-course meal costs twice as much as a four-course meal, you generally go with the four courses.
“And as I can attest, because news is social, you don’t end up reading the FT very much even after you’ve paid through the nose for your subscription. I read news which is shared with me, and the people in my social circles don’t share FT stories all that often. In turn, I want to read news I can share, and it’s very hard to share FT stories, since I can’t assume that the people in my social circles, or the people reading Counterparties, have FT subscriptions.
“This I think is the real problem with the FT’s pricing strategy. In the old world, the more you charged for a subscription, the more it was valued, and the more your journal was read by its subscribers. In the social world, the more you charge for a subscription, the less it gets read by its subscribers. As a result, the amount I end up paying per story that I read becomes enormous. I kinda wish the FT had a ticker, like the NYT did at one point, telling me how many stories I’ve read this month. It would give me some kind of masochistic thrill, working out what vast sum I was paying per article. Either way, over the long term, the marginal cost of reading an FT article will become so high that even business-news junkies like myself won’t be able to justify it any more.
“On the other hand, there could be a silver lining here. The FT’s pricing doesn’t make sense as a long-term strategy: it makes new-customer acquisition extremely difficult, and it only serves to remove the FT ever further from the minds of the global professionals it really wants to reach. As a short-term revenue-maximization strategy, on the other hand, charging people as much as $640 a year for an online-only subscription makes all the sense in the world.”
Read more here.