FT: Online Subscribers Outnumber Print Ones

December 7, 2012 • Media Economics • by

In September this year online subscribers to the Financial Times exceeded 300,000 (313,000 to be precise) for the first time, recording a growth of 17 percent since the beginning of the year.Considering that the total paying readership amounts to 600,000, the number of readers who access the content of the British economic-financial newspaper online through new generation smartphones and tablets, has thus surpassed the number of subscribers to the print edition.

The growth registered by the FT has been impressive, particularly in the last two years where the number of digital readers has more than doubled – just think that in July 2010 the total readership stood at 150,000, and has been consolidated thanks to the diffusion of mobile technology. Global sales in the quarter ending on 30th September throw light on the dynamics of this market sector: Apple sold 26.9 million iPhones, up 58 percent compared to the same quarter in 2011, and 14 million iPads, up 26 percent, while Samsung sold 56.3 million devices, twice the number of those sold by Apple. Finally, the total sale of smartphones, again with reference to the third quarter, amounted to 179.7 million, a rise of 45.3 percent compared to 123.7 million in the same quarter last year. The popularity and sales of smartphones and tablets represent both an opportunity and a challenge for the publishing industry. On one hand they offer the opportunity of expanding the user base, but on the other they present the challenge of managing to accompany the service with advertising revenue. The Financial Times, for example, has increased their number of online readers year after year but this has not been followed by a similar growth in advertising revenue.

Even though revenue in general has grown by 7 percent, the weak link is the profitability of the online and digital components. Monetizing content distributed via smartphones is the industry’s greatest challenge. The FT has achieved its first important goal: it has demonstrated that online subscription is a sector with room for growth. Online news subscription – which divides the public by degrees of access, allowing free access to only a limited number of articles – is becoming a credible business method for a number of newspapers in the UK and USA. While readers’ reactions to the introduction of payment systems is encouraging, the main criticism, as demonstrated by the Financial Times’ own history, is advertising investment which does not sufficiently reward the greater reader loyalty gained through the introduction of the paywall. This phenomenon is common to other publishing houses. The latest figures presented by the New York Times show that it has 566,000 paying users, including those of the International Herald Tribune, a considerable readership higher than that of the FT, yet still unable to capitalize on advertising revenue. Recent headlines have flagged the forthcoming introduction of a paywall by thestar.com, the online version of a daily newspaper in Toronto, Canada. The new system will be implemented simultaneously with the restyling of the website. “The transition to paid subscription must necessarily be associated with greater journalistic quality,” says publisher John Cruickshank, “The aim is to create the basis for an improved multimedia experience that can satisfy the interests of the readers and at the same time meet the needs of the advertising investors.”

In Italy the debate is ongoing. Corriere della Sera and Repubblica are both looking into possible paywall options in 2013. In this case the mix of content currently available would have to revolutionized, transferring the quality traditionally associated with print journalism to the online medium. Accessing an Italian newspaper online is often a frustrating experience with all the advertising pop-ups and banners that constantly overlap the text compromising the reader’s experience. Will this be resolved by the introduction of a paywall, or will it be, as the Guardian has shown, a problem that has must be resolved regardless of paywall implementation?

Article translated from the original Italian by Anne Jamieson

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