Comment: FT shows the way in online charging

27th Jul 2009 14:46

Judging by Financial Times publisher Pearson's latest update, people are yet to tire of keeping up with the twists and turns of the credit crunch.In the first half of 2009, revenues declined by 13% at the company's FT publishing division due to the advertising slump, but the pink paper's readership is up 15% to 417,000 according to one survey and its online edition saw an 18% increase in paying subscribers to 117,000.As chief executive Marjorie Scardino pointed out today, the FT has cut its dependence on advertising from more than 50% in 2000 to about 25% today. As well as continuing to offer incisive news and analysis, the FT has remained at the cutting edge of the rise of the internet, most recently launching a new touch screen interface for mobile phones and an application for the iPhone.The FT is unique among the UK national newspaper market in charging customers for online content and, in many ways, appears more like one of the specialist business publishers that have held up relatively well during the credit crunch, such as Informa and United Business Media, than a conventional newspaper group. Many FT readers use it more for work than fun.This is bad news for newspapers. While high-powered executives are still willing to pay a premium for the latest market news delivered to their Blackberry or iPhone, the same value does not appear to be attached to celebrity gossip, politics and local news.Regional newspapers are having a particularly bad time of it, dependent as they are on the depressed advertising market. While circulations have not fallen through the floor in the same way as advertising revenues, it appears that people are still reluctant to part with more than 50p a week to keep abreast of developments in their local areas. That said, there is one organisation that spends millions of pounds providing local news on a daily basis and presumably does this to meet demand. Why would consumers pay a premium for local news either in paper form or online when they get it free of charge (ignoring the licence fee) by the BBC?The glitzy features provided by the BBC website - email news, podcasts interactive TV - are in fact not dissimilar from those helping the FT stay on top of the digital revolution.If people didn't already have to pay about 40p a day per household for what is basically a state TV, radio and online newspaper service, 'general' news providers may have more success in charging for content in the same way the FT does.In the meantime, a change of fortune at most newspapers, whether national or local, appears to depend on a revival of the advertising market; emulating the FT model seems a long way off.