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March 28, 2022, 2:55 p.m.
Business Models

Can’t afford $40/month? The Financial Times wants to tempt you with a subset of its stories at a fraction of the price

Its new app, FT Edit, will feature “a curated selection” of eight “deep-dive articles” each weekday morning at a price almost all of its readers can afford. But the ghost of NYT Now looms ominously nearby.

Imagine an esteemed global news organization — known worldwide for its quality, but also for attracting a relatively elite and moneyed audience. It’s betting big on digital subscriptions as the way forward, but it feels stuck on one key point: pricing.

The market has shown that lots of people will pay for its high-priced subscriptions. But there are many more — millions more — who seem to enjoy their journalism but aren’t willing to pay full price.

Could you somehow create a new product — say, an iPhone app — that would offer a limited subset of your work in a simplified interface and charge a lower but non-zero amount for it? Would that open up your business to a whole new set of subscribers?

In 2014 — eight years ago nearly to the day — The New York Times bet that it would. That was when it launched NYT Now, an $8/month1 iPhone app that was “part of a strategy to attract readers wanting more than the 10 free articles a month available on The Times’s website but who might not want to pay for the full news report.”

NYT Now was well reviewed both as an app and as an editorial product, including by me. But as I wrote back then, it was hard to figure out who the paying audience would be.

As much as I like individual elements of NYT Now, I’m not anticipating big subscriber numbers. A digital subscription to the Times runs $15 every four weeks; NYT Now costs $8. I have to think the population of people for whom $15 is too pricey but $8 is just right is pretty small. Getting people to pay for digital content is hard, but the big challenge is getting someone from $0 to $0.01 — the act of commitment to payment. I don’t expect NYT Now to be able to do that for hundreds of thousands of users.

My anticipation was correct. NYT Now never attracted a ton of paying customers — reportedly only 20,000 — so the Times killed the subscription and made it free a year later. The next year, they shut it down entirely. (Its best ideas have been incorporated into the main Times mobile app, which probably has as much DNA from Now as from its own iterations pre-Now.)

Fast forward to today: The Financial Times is making its own NYT Now, named FT Edit — available for roughly $5 to $8 a month, depending on your currency:

The FT Edit is a new app launched by the Financial Times that will give readers access to 8 articles of in-depth news content, every week day. The app offers readers a curated selection of deep-dive articles in response to an increasingly crowded newsscape and distractions from the proliferation of digital platforms, channels and formats.

By interrupting the endless news cycle with this slower, more considered approach to news, the FT Edit will allow readers to take a step back and focus, creating a space to learn and get deeper into the story. The FT believes it will appeal to those looking to get behind the headlines and form their own opinions.

(A limited set of high-quality stories, delivered daily after being selected by skilled editors? Hmmm, sounds suspiciously like a print newspaper.)

If you’ve got an iPhone — no Android yet — you can check it out here.

So if NYT Now was a marketplace flop, why would the FT pull out the Times’ old playbook? And will it end any differently this time? I think there are a few things in FT Edit’s favor that weren’t in NYT Now’s — but that it’ll still have a but of a rough go.

Let’s look first at a few reasons why it just might work.

There’s premium, and then there’s premium.

The New York Times is the premium general-interest newspaper in the United States. But it’s still a general-interest newspaper, one that seeks something approximating a mass audience. That’s why its basic digital subscription when NYT Now launched was $15/month2 — a price higher than nearly all local newspapers at the time, but still well within the range of what a typical middle-class American could fit into their budgets.

The top business newspapers, though, are in another world. Because (a) they serve a significantly richer audience, (b) they can pitch themselves essential to readers’ jobs, not just their understanding of the world, and (c) they can often be expensed to an employer, they have a much higher pricing window.

The base price for a Wall Street Journal subscription is $39/month. The Australian Financial Review charges AUS$59/month (about $44 in U.S. dollars). The cheapest digital subscription the Financial Times sells is $40/month — and that doesn’t even get you all its journalism! To get the “agenda-settingLex column and some exclusive newsletters, you have to buy “Premium Digital” for $69/month.

Those price points make it very hard for the non-rich, non-business person to consider a subscription — which raises a quandary for their publishers. The FT and the Journal both contain lots of excellent journalism that isn’t business-specific, that would be of general interest. But when your business strategy is all about a hard paywall, how does it reach a general audience?

One strategy The Wall Street Journal has for answering that: Its stories are included in Apple News+, Apple’s $10/month subscription product. Now why would a newspaper selling $39/month subscriptions also jam all its content into a crowded app that runs a quarter of the price? They believe Apple News+ is reaching a different audience — one that enjoys the Journal’s non-business content but isn’t going to pay full freight. Here’s News Corp CEO Robert Thomson:

…the arrangement is helping introduce new readers to The Wall Street Journal…­including women and young people who might not otherwise be aware of its breadth of news coverage ­beyond business news.

“That Apple News partnership allows us to focus on that tier of content and bring in a significantly new audience that we would hope to graduate to a paid WSJ subscription over time,” Thomson said in an earnings call last week. “And it is a genuinely different audience. It’s actually, of late, more women than men. For The Wall Street Journal ­itself, it’s more men than women.”

I think you have to look at FT Edit through the same lens. Their high-dollar business model cuts out a much larger group of people than the Times’ does. That incentivizes the hunt for products that can serve them.

These aren’t the FT’s “essential” reads.

One of the more puzzling quotes I read when NYT Now came out was from Denise Warren, the company’s executive vice president for digital products and services. She’s discussing the market differentiation between the core Times subscription, NYT Now, and a super-premium tier launched at the same time, Times Premier.

“We see it as three options,” she said. “Essential, which is NYT Now; extensive, which is the core subscription package; and exclusive, which is the premier plan.”

Essential. NYT Now was supposed to offer the essential New York Times. As I noted at the time, NYT Now’s editorial selection was largely interchangeable with the main Times app or NYTimes.com.

At this writing, the top eight Times stories in NYT Now are the same top eight stories on the desktop version of NYTimes.com. The headlines are identical or very nearly identical to the ones appearing on the web. (Headline in NYT Now: “Obama Claims Victory in Push for Health Insurance.” Headline on the story page on NYTimes.com: “Obama Claims Victory in Push for Insurance.”) NYT Now stories do seem to use different lead art in a healthy number of cases, often elevating a photo that appears lower in the story on desktop to top billing in the app. But it’s pretty darned similar.

In other words, it was offering what Times editors considered their top stories of the moment — whether that’s breaking news in the Middle East, an analysis piece from Washington, or a months-long investigation — wrapped in a nicer package. That made NYT Now not that appealing to new paying audiences — but very appealing to segments of its old paying audience, namely its existing subscribers. The $8 NYT Now app came free if you paid for the $15 main Times app, and lots of those customers preferred it.

It’s good to make a better app for your existing customers! But it’s not great if new subscribers was the whole point of the exercise.

The FT is taking a different (and, I think, smarter) approach with FT Edit. Remember, it’s offering “a curated selection of deep-dive articles” — not the top headlines of the day, or of the moment. Here are today’s:

These aren’t the moment’s top headlines; of the eight stories, only one is currently on the FT’s homepage.3 Three of them were published on the web yesterday, but the rest are older — two from Saturday, two from Friday, one from Thursday. I wouldn’t call them all “deep dives,” as the FT does; the estimated reading times per story are 3, 3, 3, 4, 4, 4, 5, and 10 minutes. Four of the eight are opinion pieces.

No one will turn to FT Edit for “the latest,” the way they could (and did) with NYT Now. That should help with differentiation.

The market pitch is different this time.

Look at some of the language the FT is using to talk about FT Edit.

…a curated selection…in response to an increasingly crowded newsscape…distractions from the proliferation of digital platforms, channels and formats…interrupting the endless news cycle…this slower, more considered approach to news…to take a step back and focus…creating a space to learn…those looking to get behind the headlines and form their own opinions…ensure your screen time is time well read…invest your time in the stories that matter with our expert selection…break away from endless scrolling and satisfy your curiosity…

That sounds less like a news product than a new anti-anxiety medicine, or a therapy session. The pitch isn’t “we’ve got news,” it’s “you’ve got too much news, and we can fix that.” That may or may not be true — I admit thinking it’s kinda baloney — but it’s nonetheless a real use case, a real problem that needs solving. That’s a better place to be than how the marketplace saw NYT Now, as “the Times, but less of it and for millennials.”

It’s a different era when it comes to paying for digital news.

2014 was a million years when it comes to the digital subscription business. Back then, the Times had 760,000 digital subs. Today it has 5.9 million for the core news product and more than 10 million subs overall, with only 800,000 of them still for the print paper.

The FT is at 1 million digital subscribers, up from 435,000 in 2014. That’s impressive, but nowhere near the Times’ rocketship growth — again suggesting the limits a high price point puts on your prospects.

Paying for news online has become something more like a mainstream activity in the U.S. and other rich countries. The same’s true for all sorts of digital goods (Spotify, Netflix, and so on.) That simple passage of time should give FT Edit a better shot than NYT Now got.

So that’s the good news. How about reasons it might not do any better than NYT Now did?

Apps are still niche.

Not many people use dedicated, publisher-owned news apps on their phones. People get lots of news inside mobile apps, of course, but they’re mostly social platforms (Facebook, Twitter) or web browsers (Safari, Chrome). Within news organizations, mobile apps are generally considered products for their super-fans, the most dedicated of Times lovers or Post stans. The people willing to download and use a publisher’s app are those already strongly attached to the brand. Even back in 2014, the median number of new apps a smartphone user downloaded per month was zero.

FT Edit will send push notifications, but there’s no guarantee their time of sending will line up with the moment someone is ready to ~invest their time~ in a ~curated selection~ to ~break away from endless scrolling~ and ~satisfy your curiosity~. So it’ll mostly be up to users to remember to check in daily on this app with eight semi-timely stories that they might have already seen on social. People rarely forget to check in on their social network of choice, but a news app without breaking news? That’s easy to forget.

(The great irony here for us old-timers is that the FT was once the industry’s biggest skeptic of iPhone news apps. In 2011, it pulled its iPhone and iPad apps from the App Store because it didn’t like Apple taking its 30% cut and not passing along user data. It built one of the most technically advanced news websites of the time specifically to create an app-like experience without the app. The FT maintained that position for six long years until it gave up the fight and re-entered the App Store — though without offering subscriptions through Apple. To see, in 2022, the FT creating a paid product that exists only as an iPhone app would have been surprising back then.)

Social is shut out.

Social media is, alongside search, the major path that takes readers to news sites. Publishers won’t generate subscriptions from a one-time visitor who clicked the link in a single tweet, of course. But social media is an amazing engine for story discovery, and not just for those digital transients. Part of why people subscribe to a news site is so that, when they see a link on Twitter, they know they can click it without frustration. And those links can turn a weakly attached subscriber into a committed one by increasing the volume of stories consumed. The entire idea of the metered paywall (which the FT pioneered all the way back in 2007) is to show you some free content and hope you like it enough that, the next time you hit the paywall, you’re willing to pony up.

FT Edit can’t benefit from that driver. Links on Twitter or Facebook will still lead to nowhere. (It’s possible the FT could figure out a way to direct the day’s few select stories from a social app into FT Edit — but again, those select stories are only a tiny portion of all the FT produces.) Publishers like to brand their subscriptions as “all-access”; this is “barely-any-access.” That may be fine as an editorial idea, but siloing away these stories in an easy-to-forget-about mobile app is going to make driving usage a challenge.

The app isn’t as interesting.

The FT Edit app is perfectly nice, but it’s also barebones. NYT Now innovated — a different editorial voice, curated stories from other publishers, fresher visual presentation. FT Edit is pretty much just a scrolling list of a few stories. It’s unfair to judge an app too strictly on Day 1, of course, but the constrained nature of FT Edit’s editorial proposition doesn’t leave much room for further growth. Maybe there can be some limited customization added, as The Economist has done with its similar app, Espresso. But it is what it is.

The price may be too high.

FT Edit is free for 30 days and £0.99/month after that in its native country, which is the app’s initial focus. But not forever after that — just for the following six months, after which it goes up to £4.99/month.

I see lots of people on Twitter excitedly calling this a one-quid-a-month deal, but £5 (about $7.84 in U.S. dollars) is creeping up toward a dollar amount that people start to think twice about — especially for such a constrained set of stories. (The eventual price is currently set at $4.99 in the United States, NZ$8.49 in New Zealand, AUS$7.49 in Australia, CAN$6.49 in Canada.)

If the app can deliver lots of value, that’s a throughly reasonable price. But again, it’ll take frequent, repeated usage of the app for readers to feel like that’s a price worth paying.

If there’s anything we’ve learned in the past 10 years, it’s that you can get people to pay for a digital subscription. Not all people, not most people, but some people — and sometimes, enough to make a business. The winning plan has been bundling up your journalistic work and selling monthly or annual access to it all.

What we’ve been bad at, as an industry, is figuring out other ways to get revenue from readers. Selling articles one at a time? Micropayments have flopped time and time again. A cheaper, smaller subset of your content? NYT Now didn’t work. There are successes — crossword puzzles, premium intel for rich corporations — but they’re relatively few and resistant to generalization across the industry. I’ll be rooting for FT Edit, just as I root for any other attempt to figure out new reader revenue. It’s an extremely well-run publisher that has been at the forefront of a lot of revenue strategies. But I’m not yet confident the story will have a different ending this time.

  1. Technically, it cost $8 every four weeks, not every month, but hey, that’s a mouthful. ↩︎
  2. Technically, $15 every four weeks, not every month, but hey, that’s a mouthful. Also, it’s now $17↩︎
  3. The Ketanji Brown Jackson one. The Russian spying story was also in the FT’s “most read” list. ↩︎
POSTED     March 28, 2022, 2:55 p.m.
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