The Financial Times confirmed yesterday that payment for its day and weekly passes for its online content will go through PayPal, the e-commerce business owned by eBay. The FT first announced plans of its online subscription model last August before announcing the option of a day pass last month.
Despite previous reports, the FT will not be going ahead with a "micropayment" option, a model which would allow readers to pay a small fee to access a single article online. "Micropayments simply isn't going to work if you go to an article and you spend quarter of an hour filling out forms and ticking boxes," John Ridding, CEO of the FT, told the newspaper's Digital Media & Broadcasting conference in London.
"Done right, micropayments can support a subscription model. If you get the pricing right for the micropayments, you can actually support an annual subscription," said Ridding.
News of the FT's collaboration with PayPal underscores the newspaper's emphasis on digital subscriptions amid an increasingly difficult climate for print media. While Pearson, the parent company of the FT, recently posted a 13% increase in profits from last year, the FT Group, which includes FT Publishing and Interactive Data, reported that revenues dropped by 12% in the last year.
Ben Hughes, global commercial director and deputy CEO of the newspaper, did qualify that figure by pointing out that the Financial Times and FT.com, both part of FT Publishing, earned a profit last year. Hughes told Marketing Week he was "delighted" with the results of the company's print and digital divisions.
In 2009, FT.com saw a 15% increase in online paying subscribers to more than 126,000 as well as 750 companies. Revenue from online subscriptions increased by 43% over the last year while content revenue was up 15%.
Despite mixed financial reports, the FT will move ahead with their online strategy. "We believe that if you are charging for content in print, then there is no reason why you should not do that online," said Hughes.
Unless more technology is introduced to make micropayments an easy and effective way to pay for content, the FT will start using PayPal in a few months as the method of payment for day and weekly passes.