Editor’s note: Every year, Innovation Media Consulting prepares a report for WAN-IFRA on the state of innovation at newspapers around the world. The new edition is out now — here’s an excerpt from Innovation’s president, Juan Antonio Giner, writing about digital shifts at the Financial Times.
“We are moving from a news business to a networked business.”
So wrote Lionel Barber, editor of the Financial Times, in a January 2013 memo to his staff, pushing them to embrace the “new avenues and platforms for the richer delivery and sharing of information” offered by the internet.
His words had an impressive and almost immediate effect. A little over a year later, the paper celebrated its highest circulation ever, a 652,000 combination of print and digital subscriptions and an 8 percent year-on-year increase. But the milestone was not without sacrifice. In addition to redundancies, an upheaval in newsroom workflow and mindset metamorphosis, the paper seemed poised to cannibalize its print editions.
If all goes to plan, however, these sacrifices, conceived to accelerate what is arguably the most radical “digital-first” migration in European media, might just pay off.
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 Group 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.
What does this surge in digital revenues mean for the FT’s famous salmon-tinged broadsheet? To begin, print circulation, at less than 225,000, is down over 50 percent since 2001 when it reached a peak of 504,000. With such a dramatic drop, it is perhaps no surprise that digital revenues have overtaken print.
Just the same, the print product remains profitable even before including print ad revenues, an achievement which the paper attributes to its efforts to streamline print operations. For instance, the FT has reduced the number of printing sites around the world from 24 to 16. The FT has no immediate plans to eliminate the print product — quite the contrary, according to Barber, who mentioned to The Guardian that the print product acts as a “fashion accessory” and marketing tool and that it remains a “vital source of advertising revenue.”
Barber told the Columbia Journalism Review in July 2013, “First of all, we know that print is valuable. Second, it’s absolutely obvious to me that a certain class, section of people, want to read the printed newspaper.” Indicating that he reads on both his iPad and on print, Barber continued, “It’s a different kind of engagement, isn’t it? The engagement with the tablet or with the desktop…is slightly…more skittish.”
Barber and the FT have a number of changes in the works for the print product, changes that will resonate through the newsroom and reflect an total overhaul of the paper’s newsroom workflow.
“First, the 1970s-style newspaper publishing process — making incremental changes to multiple editions throughout the night — is dead. In future, our print product will derive from the web offering — not vice versa.” Thus commenced Barber’s recommendations for the new FT newsroom in an October 2013 memo.
The memo laid out the basics of the FT’s digital path, a path that includes:
Barber’s January 2013 memo on the subject specified the reduction in print resources and production which has contributed to its profitability noting:
To achieve all this, Barber indicated in the January memo that 35 positions would be eliminated while 10 digital positions would be added. Furthermore, most production would shift from the traditional late-evening work to day work in order to best accommodate reader habits.
FT.com’s managing editor, Robert Shrimsley, told Innovation that shifts would start earlier in the day and that the daily 4 p.m. meeting, at which the front page of the print edition is traditionally closed, would be transformed into “a discussion of themes for tomorrow. The print paper must be the final word. It cannot be a news magazine of yesterday’s news.”
This information has led the FT to announce the launch of new products such as:
Data has also been key for FT advertising. CEO Ridding told Mashable in April 2013 that, “We can prove in real-time quite effectively what advertising is working and put that data in front of advertisers…Our job is to provide the tools and information to justify that decision for running a campaign with the FT rather than anyone else.”
To accommodate all of these significant changes, the paper has implemented several digital training programs, amongst them Digital Learning Week (DLW). Started in 2012, DLW’s 2013 edition “featured 53 sessions and 88 speakers in four days across five offices,” according to Head of Internal Communications Emily Gibbs, who also indicated in a February 2014 article that the FT planned to launch a “Global Commercial Academy for our advertising staff (as well as) a formal digital accreditation scheme for all employees.”The FT also employs a tech team of 320 (230 permanent, 90 contractors). Apart from keeping the paper’s systems up and running, it is the team that alongside the newsroom developed the highly successful 2011 responsive design app and subsequent updates.
Innovation’s take: A “post-news” paper
Innovation visited the Financial Times in April 2014 to learn more about its structural changes, changes that originated with a September 2012 visit that the paper’s executives made to Silicon Valley. Our impression is that the Financial Times, formerly an un-integrated newsroom, aspires to be a post-integration and post-news newsroom. What do we mean by this?Firstly, the success of the paper’s mobile web app is pushing it to consider all production from a mobile-first perspective. This is reflected in the proposed workflow revamp from evening to daytime as well as the reduction in the print paper, the main edition of which is a morning paper.
Secondly, despite CEO Ridding declaring otherwise, it appears that the FT is adopting a model similar to that of a wire service in its mobile approach, with mobile news being complemented by context, comment, and analysis in the print product, as well as to a certain degree on the web. The combination of these two approaches has a “post-news” effect.
The biggest challenge for the FT, we feel, lies not in its transition to digital, which can be achieved with web-savvy staff, but in the transition of the print staff to this “post-news” method. Daily editions have already been reduced, pagination has been rethought, and the commissioning process has been streamlined to name but a few evolutions.
Print editions will likely remain an integral element of the FT’s success and print products such as How To Spend It will continue to attract top advertisers and audience. The format of the paper, however, should change from the current broadsheet to a more compact, stapled arrangement.
What may prove difficult on the FT’s digital side is the change in competition. Now, not only must it compete with its traditional print rivals — The Wall Street Journal, Fortune, Forbes, etc., which all have significant digital presences — but also with digital natives the likes of Business Insider, Bloomberg, and Quartz.
All in all, the FT has accomplished much, but there remains a good deal of innovation ahead.
- strong editorial and executive leadership
- global brand
- high-quality products
- need for new workflows
- lack of integrated, multimedia CMS
- newsroom architecture not optimized for necessary workflows