The music industry long ago discovered that their most devoted audiences were interested in experiences above and beyond just the track, and willing to pay the price which accompanied them. A 2010 New York Times piece details some standouts: $900 Eagles tickets that buy you dinner with the band, an $800 photo-op with Christina Aguilera, and $1,750 Bon Jovi tickets which allow you to take your seat home with you.
The news industry is coming to a similar conclusion. While none of our packages are likely to include drinking whisky with Metallica, the underlying idea is the same. Dedicated core audiences are becoming more interested in added experiences, and they are less price-sensitive than readers at large. There is a huge opportunity for publishers to find ways to serve this audience in ways that benefit both them and the publication. This is especially true in our digital products.
This realization has been a long time coming. In the early days of internet news, publications were hesitant to charge readers online for the same journalism they’d been paying for on newsstands for more than a century. Perhaps it was a cardinal sin. The Financial Times was among the first to boldly posit that good journalism requires funding, and realize that a strong digital subscription model was essential to safeguard ability to continue to be an active, worldwide journalistic operation.
Newspapers’ websites were free. Soon, of course, it became clear to many that subscriptions were the way forward, and the online subscription model became a fundamental piece of revenue for organizations, including the Financial Times. (FT.com launched in 1995, and introduced digital subscriptions in 2002).
Business models today run on a spectrum. On the one end are those who believe that news wants to be free — this group includes both legacy organizations like the Guardian, and newer digital-native publications like BuzzFeed and Vox.
On the other end are high-premium offerings. Politico cofounder and former CEO Jim VandeHei recently told Recode that he envisions subscribers paying $10,000 or more for news and analysis from his new startup, Axios. Tech industry publication The Information also has a new invitation-only subscription for professional investors, including hedge funds, VCs, and private equity managers: CJR reported that, for $10,000 a year, these subscribers get more access to the reporting team, with private monthly conference calls and in-person briefings.
In 2017, plan to see more of this: An essential area of growth next year will be in premium products at premium prices. Premium has an editorial benefit, too: it allows you to go deeper into your core areas for your core audiences, and to really dig into topics that might be too esoteric for general readers.
The Financial Times, too, is putting more resources into premium products.They offer customers unique, high-quality content, which we’ve found customers are willing to pay for. A premium subscription to FT.com will get you unlimited access to the FT’s award-winning columnists; financial analysis from Lex and emerging markets data from EM Squared; perks like twice the number of monthly gift articles; and exclusive newsletters, like the newly-launched Authers’ Note.
And it works: Premium is a popular product for us, which allows us to invest in our journalism and continue to add value. One such product is Martin Sandbu’s Free Lunch, a daily newsletter on global economic policy to Premium subscribers. Its readers are more engaged than FT readers at large — 75 percent of them meet our standard of engagement — and adding new subscribers every day. In addition to our individual Premium subscribers, more than two-thirds of the world’s top business schools and 50 central banks rely on the insight they get from the FT’s premium subscription.
Premium products have been one tool helping the music industry actually grow, despite predictions of its death for most of this century — in 2015, the industry’s revenue grew by more than 8 percent. In media, we’re hopeful that premium can do the same for us. Whereas in music, premium means more access, in media, it means deeper reporting and extra analysis, resulting in more engaged readers. Though if anyone wants to pay $1,000 for a photo with me, I’ll consider it.
Jon Slade is the Financial Times’ chief commercial officer.