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Content to be Different

Ever since the dawn of the internet, publishers have agonised over whether to charge for access to their content. The FT had built a successful paid-for operation, but the barriers they put up reduced their online profile and their ability to earn advertising revenue. To combat this, they recently came up with a new approach to content charging. Martin Ashford explains their rationale.

By Martin Ashford

Somewhere, back in the late 1990s, publishers learned not to talk of a ‘newspaper’ and a ‘website’ as two different things, but to think of them as parallel channels for the delivery of our content.

"Content is King", we assured ourselves; strong in the belief that somehow this would protect old media properties from erosion by the new. "Yes," came the reply from cyberspace, "but online content should be free." And so it was free. For a time, anyway.

Different business models

When the bubble burst, and some hard questions had to be answered about where the return on online investment might come from, one of the routes that the FT and others explored was to charge for web access. Paid online subscription models were tried by a number of newspaper publishers and some remain in place today. Arguably, the most successful has been the Wall Street Journal, with close to a million subscribers and a revenue stream reported to be around $50 million annually.

Not everyone went down this route, however. Most UK national newspapers remain wedded to the free access model. From a commercial standpoint, this is a simple numbers game as publishers compete to deliver an online audience which they hope will be sufficient to deliver payback from advertising. There has been something of a dash for growth recently, as other titles seek to narrow the Guardian’s online lead (for the record, ABCe figures show the Guardian with 19.5 million unique users in February 2008, compared to 17.0 million for the Daily Mail). It may be an exciting spectator sport, but does it really make commercial sense for the also-rans who are puffing along behind these leaders?

Actually, what has happened since the bursting of the first dotcom bubble is that the "content should be free" mantra has given way to a recognition that different models are appropriate in different situations. B2B publishers have moved very firmly down the route of paid-for online content. The case for this was well made in the March / April issue of InCirculation by Tim Weller. As he said, "Most B2B publishers are making money online because they understand how to monetise their content. The buyer meets seller business model helps us here: most of our sites are narrow cast, so the content is very focused. Consumer publishers find it difficult to understand how you can make money."

Within the FT Group, we have some true B2B titles, delivering specialist content to a tight niche audience, and this is the kind of market where paid-for content has become the norm. But the Financial Times newspaper itself is firmly in the consumer camp, which is where the greatest diversity between publishers is apparent.

Looking around, some news sites are entirely free, others (such as the Economist) put ‘premium’ content behind a subscription or registration barrier, others charge only for archives or specific material such as crosswords. The New York Times was reportedly making $10 million annually from its paid-for premium level "TimesSelect", but abandoned it last autumn. Slate, USA Today,, and Business Week have all reportedly turned back from the subscription model. Yet the Australian Financial Review shifted to subscription last year while Rupert Murdoch’s supposed enthusiasm for taking free has apparently waned. Attempt to follow the links from the homepage of the Wall Street Journal and you will rapidly hit a subscription barrier page.

Scarce advertising dollars

If the status quo is somewhat confusing, times could be about to get much harder, especially for titles who are not at the top of the leader board. The word from the US is that online advertising is starting to become tougher to pull in. Growth this year is unlikely to match last, which was well down on the 36% seen in the US in 2006. Advertising on news sites is in any event growing more slowly than the web average. And the available advertising dollars are being fought for tooth and nail. As Maurice Levy, chairman and chief executive of Publicis, said to the FT last autumn, "Everyone is seeing advertising as the manna… Far too many people are building plans based on advertising and they may well be disappointed because there is not enough money for everyone."

So where does the FT stand? Back in the carefree 90s, we had a completely free-to-air website. We then moved to a paid-for model, putting a significant part of our content behind a subscription barrier. This allowed us successfully to build up a revenue stream from around 100,000 subscribers, but it had one huge disadvantage. A key role of a newspaper website is to act as a shop window for your content. By putting up a barrier, you are in effect slamming down the shutters over that window in the face of exactly the sort of people you want to attract.

Potential readers coming to from a search engine such as Google or a site such as the Drudge Report were being turned away in their thousands. While we have no interest in competing with the Daily Mail for mass market eyeballs, we do want to encourage readers in, not turn them away. As Ien Cheng, publisher and managing editor of, put it: "We’ve had a barrier against some of our best content: of course we’ve missed out on traffic there and, therefore, advertising." So it was time for another rethink.

The Frequency Model

The result was a "third way", a course between the Scylla of subscriptions and the Charybdis of free-to-air, and available on a browser near you since last October. We call it the Frequency Model. If you arrive on our website either by typing in its URL or from a link or search engine, the first article you see is free. So is the second. And the third. But, after viewing five free articles in the month, you will encounter a registration page. After that, you can continue to use for free up to a further 25 articles in the month. Only then, by which time you are clearly someone who has understood the value of our content, will you see an "invitation" to take out a paid subscription. To go further will cost you £99 in the UK, or £199 for a premium subscription including our most valuable "Lex" content.

There’s something counter-intuitive about this. The casual shopper gets away without paying, whereas the loyalist gets charged. Shouldn’t it be the other way round? But the more you think about it, the more it makes sense. Not only does it open the shop window while continuing to charge for the goods inside, it also greatly enhances our attractiveness to advertisers. As I already made clear, the FT is not in the chase for gross traffic. With an average of 6.2 million unique users over January and February 2008, we have a large audience, but not on the scale of the Guardian. It is the quality of our readership which is key to our appeal to advertisers, and registration and subscription help us to demonstrate it. When you register, you tell us your business sector, area of responsibility and job title. Our ability to target advertising accordingly is worth a substantial ad-rate premium.

At the centre of the new strategy is what Ien Cheng calls engagement. "Some users want to have unlimited access and think it’s worth paying our reasonable subscription price, some people are happy with a slightly less engaged relationship until such time as they decide they want more. We’re happy with both… That’s the beauty of online media – you don’t have to treat everybody the same."

Results so far

So, how is the Frequency Model working out? Suffice it to say that the FT is pleased with results to date. Unique users are rising strongly, a quarter of a million users have registered, and subscriber numbers are steady. James Montgomery, the site’s editor, says, "What we want is to have a nucleus of readers who come to the site at least once a day, and hopefully more than once a day, and when they do they read several articles". It seems to be working: users continue to spend more time on per visit, with page views per unique user up 32% since the launch of the new access model.

On April 1st, another piece of the jigsaw clicked into place. Many readers access our content not directly from but via a news aggregator such as Factiva or Lexis-Nexis who charge companies a licence fee for news feeds from all round the world. In our view, these channels were giving our content away much too cheaply. After due notice, therefore, we have embargoed the feed of FT content through these aggregators unless the end-user has taken out a digital licence directly from the FT. With 250 blue-chip companies already signed up, we are building direct relationships with a vitally important client base from whom we were previously cut off.

So, could be a model for other newspaper websites? That is not really for us to say. As has been seen, there are many models out there and we do not claim that ours is right for everyone. But we do have one fundamental conviction that others may like to reflect on: if you invest in strong, unique content, which has a real value to your target readers, then you should not be frightened to assign a value to it. Contrary to the once-popular view, your content doesn’t have to be free.