FT rides high on paywall success

I remain dubious that that paid content can work for a general news site. And early indications are that News Corp’s The Times is having a tough time of it in the UK after introducing paid content, losing a big chunk of its audience (News has yet to officially comment).

Business sites have a sharper case.

For starters, they're trying to build the best audience, not the biggest, so aren't phased by the rabble heading for the exit door at the first sign they have to pay for anything.

Many business readers are willing to pay for any information they think will give them the inside running. And, yes, they can often do it on their expense account. 

Case in point: the Financial Times.

Yesterday, Pearson announced that the UK business paper’s online edition had 149,000 digital subscribers by the end of June, up 27% year-on-year.

And FT.com subscription revenue was up 48% as Pearson tightened the site’s paywall, restricting the number of free articles per month from 30 to 10 - and requiring all-comers to register up-front.

(I don’t read the FT, but I do read Pearson’s other flagship title, The Economist. I’ve noticed this more general interest title still has premium content, but overall it’s gone in the opposite direction from FT.com, with a lot more content now free on The Economist’s site.)

Pearson is primarily an education publisher (it also includes Penguin). The FT’s revenue – up 9% to £192 million revenue for the year ending June – was, relatively speaking, dwarfed by the group’s overall revenue (also up about 9%) of £2.34 billion, with profit tripling from £28 million a year ago to £92 million.

Still, the FT is doing more than holding its own.

The FT’s paywall is helping to diversify revenue at a time when online advertising is still weak, Pearson’s chief executive told Bloomberg.

Speaking to the enemy The Guardian, FT chief executive John Ridding talked about the value of the holding demographic data on paywall subscribers. Indeed, this one of the strongest arguments for a online paid content – it gives you that rarest thing on the web: a qualified, well-defined audience, just as you get in ye olde world of print subscriptions.

FT.com plans to milk paid content further, with a blog aimed at finance professionals planned for later this year.

An interesting side-note: Pearson told Bloomberg that 250,000 people had downloaded the FT.com iPad app (above), mirroring the success of the NZ Herald’s iPad app here, which saw 8000 downloads during its first week of availability (no, there weren’t 8000 iPads sold in New Zealand, but many expats hit the AppStore).

Still unknown: how many of those who downloaded the iPad app, and took a two-week free-trial offer, subsequently signed up for paid content.

Currently, when you load the NZ Herald’s iPad app, a video ad for Mercedes plays in the 30 seconds or so it takes for content to load.

The NZ Herald’s online editor, Jeremy Rees, told Media 7 that once the Mercedes deal expires), in about six weeks, the paper will consider its options. One possibility is asking people to pay for the iPad app.

If so, it will have to be have to be on a weekly model (for those outside the UK, the FT charges $US6.25 a week for a premium subscription – which includes its Lex expert analysis column – and $US4.25 for a regular subscription).

For Apple has turned the screws on publishers, prohibiting them from offering annual subscriptions (the option most would choose for financial and operational convenience) - to the chagrin of at least one major US publisher, Time Inc. 

READ ALSO: NBR shrugs off recession as paid web subscriptions top 8000