How data from Financial Times readers lead to more readers and revenue
The Financial Times "broke the law of large numbers last year," Ryan Chittum wrote in CJR: It added digital subscribers at a fast rate, seven years after it launched its paywall. It now has 652,000 paying subscribers across platforms, an FT spokesperson told Poynter. "We've never understood this approach that journalism online should be free," FT CEO John Ridding said when reached by phone.
But FT's approach goes beyond a metered paywall: When it launched, "I don’t think we really understood the power of the data and the audience understanding that came with the subscription model," he said. "We’ve been able to build a system of understanding our readers."
That means customizable alerts for customers whenever a story about a client or a competitor hits FT's website, as well as feeding readers content their "cohort" read as well. "We’ve been able to use the information we’ve already got from our customers to create a virtuous circle," Ridding said. The growth in subscriber revenues means advertising is now just one of several revenue streams, he said. "We absolutely value advertising," Ridding said. But "the most important relationship is with the reader."
FT's circulation was 8 percent higher across platforms last year, an FT spokesperson told Poynter, and digital subscriptions "grew 31% to 415,000, more than offsetting planned reductions in print circulation," the spokesperson wrote in an email. The circulation of FT's print edition in the U.K. in February dropped nearly 17 percent over last year, and last October it announced a plan to end what Editor Lionel Barber called a "1970s-style newspaper publishing process – making incremental changes to multiple editions through the night." Ridding said last year was the first in FT's 125-year history that the print paper "was profitable before advertising" -- that is, revenue from subscriptions covered its costs.
Even so, staffing up on print would "be the wrong thing to do," Ridding said. "We had a quite complicated news production with multiple editions." The "incremental changes" Barber referred to are more easily done online. More readers are coming to FT through mobile devices, he told me: "We think this is the year mobile readership will overtake PC readership." Mobile has "a very strong business model not just in terms of subscriptions but advertising."
I asked Ridding if any of the changes he says are working at the FT might translate to other news organizations that aren't intensely focused on a particular audience like businesspeople. When he's speaking with other publishers, he said, "I think probably one of the most common questions is how does this data thing work? How do you approach data? What's the value of this data?" The FT's focus on customer data has "affected everything," he said.
Ridding referred to opening of the '60s British TV show "The Prisoner," in which actor Patrick McGoohan runs down a beach being chased by a murderous beachball. Informed he'll be known as No. 6, McGoohan shouts, "I am not a number! I am a free man!" Actually, Ridding said, it's quite possible to determine what readers want based on their aggregate numbers -- he stresses FT guards individual data closely. "I suppose the surprising thing is cohorts behave like cohorts," he said.