Financial Times to change way it charges for online content

The Financial Times is ditching the metered access model it pioneered and switching to an approach that will require users to pay to access most of the newspaper’s content online.

Currently, readers can access up to three articles a month if they are registered, but must become subscribers to access any more.

Starting on Friday, the newspaper, which is owned by the Pearson Group, will begin rolling out a system where visitors are offered a month’s trial providing access to most FT content for a “nominal” sum.

The FT says it is still working on the details of the new system, but initially those already registered will still be able to access three articles a month.

FT CEO John Ridding said: “Eight years ago we launched the metered model, which has been fantastically successful. It’s been a real source of transformation and a good source of contribution to the business. We are evolving this and developing a different approach which is paid-for trials, whereby as for a nominal sum, will have unlimited access for a month.

“The theory is that within that they can build a habit, and then become a subscriber.”

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The FT says using paid trials rather than a meter increases subscription rates by between 11% and 29%.

According to the company’s 2014 results, the metered model helped the FT reach a print and digital circulation of 720,000. Two thirds of its readers have digital subscriptions, which are up 21% year on year to 504,000.

Ridding said profits at FT had tripled year on year, however Pearson doesn’t break out the newspaper’s earnings.

Ridding said the FT plans to attract new subscribers via social media and targeted marketing campaigns to entice specific groups of readers or regions, not just already paying customers.

The FT may also make coverage of specific stories or events open to non-payers to drive subscriptions.

The model moves the FT closer to the approach taken by the Wall Street Journal, which makes some content free but charges for the bulk of its content for all readers.

The changes to the charging model will be accompanied by a new focus on audience engagement measured in terms of frequency of visits to the FT, return visits and time spent on page.

Ridding said the impact of any potential drop in total traffic would not impact advertising significantly, as the FT’s most loyal visitors are already subscribers and new approaches to advertising such as selling blocks of time rather than impressions made those readers more valuable.

FT.com is also having an overhaul, with a greater focus on mobile.

“We are absolutely determined that we build our reach [but] we want reach and return,” added Ridding.

“A lot of new ventures in news media are very reach focused. I think that’s rational when you are starting a business and you are building an audience, but you do also need to figure out some point how you are going to monetise it.

“I think the news industry for generations whether it is print or digital has fixated on reach and not thought about return.”

Pearson results steady with FT circulation up

Digital now accounts for 70% of the FT’s total paying audience, according to Pearson’s preliminary results for 2014, published on Friday. The company said the digital circulation growth had offset “continued structural declines in print content and advertising”.

But revenues at the Economist Group were hit by a variety of factors including weaker advertising revenue.

It said the Economist’s circulation remained “robust” at 1.6m with digital subscriptions up 23%. Its daily news app, Espresso, was downloaded almost 400,000 times.

Pearson chief executive John Fallon said the changes to the Financial Times charging model would help “build deeper engagement that drives greater value from each user, to reach an even broader audience”.

He said the company had to be “completely restless” in its approach to digital innovation and said there was “still a significant opportunity for the FT to grow particularly in north America”.

“We are really pleased with the progress we have made at the Financial Times. It went through, in 2013, its own programme of restructuring which has helped very significantly to grow the business this year. It has itself accelerated the shift from analogue to digital.”

Looking more widely across the Pearson business, Fallon said: “Last year was every bit as tough as we thought it would be. This year we expect to grow organically for the first time in five years. 2014 was a big year for Pearson, it feels like we have now passed a tipping point.”

Also on Friday, Pearson announced the appointment Coram Williams, currently chief financial officer of Penguin Random House, as its new chief financial officer. He succeeds Robin Freestone, whose departure this summer was announced last year.

The FT owner reported an as expected 5% rise in 2014 in underlying adjusted operating profit and reiterated its pledge to return to earnings growth in 2015 as two years of painful restructuring come to an end.

The publisher, which has restructured under new leadership, reported 2014 adjusted operating profit of £720m. Sales were flat on an underlying basis at £4.9bn.

Adjusted earnings per share came in at 66.7p, slightly better than a forecast of 66p given in January and the group reiterated that it expected this to grow to between 75p and 80p in 2015, in what would be the first rise since 2011.