The financial crisis that spurred the media crisis has left journalists, publishers, bloggers, and other media professionals on an unrelenting quest to find the a business model that meets the demands of both the digital and print worlds. As this quest continues, Peter Kirwan, writing for The Guardian's Media Blog, suggests that, at least in the digital realm, Financial Times' website FT.com has found the answer.
Kirwan examines what the Financial Times did over the past few years to turn itself around from a failing publication in 2002 to one of the only publications to make a profit last year while the rest of the media world seemed to fall apart. This leads the author to wonder if "the FT has unlocked the secret of eternal profitability."
Unfortunately, Pearson, the company that owns the FT, doesn't release individualized profits for their publications. Through some "dip digging," Kirwan comes to the conclusion that despite raking in lots of revenue the publication's profits, if any, are small. Nevertheless, the ability to make a small profit in this economic climate represents a tremendous feat for any publication and Kirwan examines three ways it was achieved.
Most notable is the increased subscription costs enacted by the publication on both the print and digital sides. Since 2007 the Financial Times increased the cost of the print publication by £2 while online subscriptions increased by more than £105. The FT is able to make these increases without losing subscriptions because the financial coverage is "has a value, unlike most news."
Although the publication has a small online reader base of less than one third of their clientele, the newspaper somehow generates 73% of their revenue from the digital aspect of their operation. This figure is slightly surprising considering FT.com has a strict pay wall that is locked to everyone except subscribed users. Yet Kirwan notes that FT.com has seen a steady increase in online subscribers which increase the profits made from subscriptions and make the publication desirable to luxury advertisers who want access to the affluent clientele that frequent the site.
In reality, it doesn't appear as if FT.com has found the solution to all the media woes. The success of the publication and the ability to turn itself around lies in its content. Few other publications, with the exception of The Wall Street Journal, provide the desired financial information and analysis that users are willing to pay for. Although more general news outlets can perhaps take some lessons from the Financial Time's success, very little is applicable. One of the most pressing issues facing news outlets continues to be how to charge readers for general news content easily found elsewhere.
Source: The Guardian