Investors in local print media companies such as Fairfax Media, News Corporation, Seven West Media and APN News and Media should take note of what’s a dramatic move from major global paper, The Financial Times as it tries to build on its already highly successful foray into the online world.
In a memo to staff this week, the FT’s editor, Lionel Barber, revealed plans to turn conventional newspaper publishing wisdom on its head by marginalising its daily print edition in favour of its collection of websites.
The paper, which is the most successful of all the world’s important papers online, plans to make the print edition a sort of analogue advertisement for its collection of regional websites. The websites will drive the slow and renewal of news stories and features, not the edition times of the print papers.
It will do this by reversing the existing model – where the FT and most other major papers – run their best stories, including late news and analysis first in the printed paper, and then the website, although the FT has started changing that mix in the past year as a cost cutting move.
The new strategy will tip newspaper thinking on its head – especially in Australia – where papers have been slow to react to the onrush of the online world, especially Rupert Murdoch’s News Corp papers.
The Financial Times has pioneered separate editions for different regions, such as Asia, the US, and Europe, on top of its core UK edition. It has also driven its digital progress further than other papers with differentiated online websites, plus expanded features and supplements online as well. Digital subscribers now outnumber print subscribers by around 100,000, according to the memo from FT editor, Lionel Barber.
That’s because the FT moved into the paywall era earlier and deeper than anyone else. Now digital revenues and subscribers account for more than half the total revenues and sales. For the past year, the paper has been trying to harmonise its print editions with its websites, cutting costs by reducing late story changes and running those on the websites rather than halting the paper.
The new strategy is aimed at preparing for the day when the print paper doesn’t exist, except perhaps in the UK and the UK and in it’s high selling and profitable Weekend edition.
The most important change outlined in the memo is that from 2014, the FT will revert back to being one global edition with no regional editions (except it seems for a strongly UK focused version of the global edition).
The websites will increasingly assume the breaking news role. The paper will be more a daily magazine, which enhances what is available on the paper’s websites.
.jpg) The FT’s editor Lionel Barber plans to turn conventional newspaper publishing wisdom on its head by marginalising its daily print edition in favour of its collection of websites. |
According to Mr. Barber’s memo;
"The 1970s-style newspaper publishing process – making incremental changes to multiple editions through the night is dead. In future, our print product will derive from the web offering – not vice versa," Mr. Barber said.
"The new FT will be produced by a small print-focused team working alongside a larger integrated web/day production team which will be a "pre-planned" paper with content focused on explaining "the most important issues of the day" with "show pages" of data and graphics. Mr. Barber said, "journalists will publish stories to meet peak viewing times on the web rather than old print deadlines. The process will be akin to a broadcasting schedule. Where once we planned around page lay-outs, we will now adopt a news bulletin-style approach."
Mr. Barber said in his memo that the FT "will continue to exude authority and quality, delivering a powerful combination of words, pictures and data to explain the most important issues of the day."
"The new FT will be a better paper to suit the times. It will remain a vital part of our business, contributing significant advertising and circulation revenues. But, crucially, it will be produced differently and more easily. The changes will impact the structure of the newsroom – and the way we practise our journalism… news editors and reporters will shift further away from reactive news gathering to value-added ‘news in context’, and that staff will be expected to remain "faithful to the pursuit of original, investigative journalism."
And why is this happening? Well, it’s easy to see from the latest circulation figures quoted in his memo. Mr. Barber said the latest UK circulation data (from the Audit Bureau for August of this year), the print editions of the FT sold a daily average of 236,281 world-wide, 15% down on August 2012.
Of those, 73,000 were sold in the UK but only 41,000 were bought at the full cover price of £2.50. More than 81,000 were sold in Europe, over 46,000 were sold in the US and there were a further 33,000 sales in Asia. And the Saturday edition sells more than the Monday to Friday papers do.
According to the half year report of owners, Pearson Plc, the FT’s digital subscriptions grew 14% in the year to June 30 to more than 343,000, with total paid circulation of 602,000 analogue copies and digital subs. Digital subs are reported to have grown since June 30, and Mr. Barber said in his memo that they now exceed print sales by "more than 100,000". That’s what’s driven this latest announcement and it won’t be the last.
What the FT is doing is going much further than its competitors around the world and in the UK. The Daily Mail in the UK is a conservative tabloid with the most popular news website in the world with 80 million or more visits some months – and it is in profit and it is free. The Daily Mail paper leads the website in some respects, but the website, with its heavy emphasis on instant news, entertainment and pictures, quite often drives readers to the tabloid. But the paper still has the big stories.
The Sun, a News Corp tabloid, is now moving behind a paywall (like the News Corp papers in Australia), but is lifting the type and variety of content behind the wall (soccer videos and other exclusive offers). The Sun will be used as a both a leader and a driver of visits to the website. But the paper is still breaking the big stories.
In the US, The New York Times has a paywall, but subscriber growth has slowed (ad and circulation revenues now exceed those from advertising sales). The Times is about to announce a restructuring of its paywall offering by cutting its monthly fee to a basic offer and allowing people to take one or more offerings (say News and Sport, or News, Sport and Business).
And in Australia? Well, there’s no definite figures yet on the success or otherwise of the Sydney Morning Herald and Melbourne’s Age’s decision to go tabloid and move its website behind a paywall earlier this year. But it is noticeable that more and more stories are appearing on the website in the afternoon and then unchanged, or with a slight update in the next morning’s papers.
The Australian continues to add some digital subscribers, but we don’t have enough independent data to measure the success of that move and it is still too early for the other News Corp papers to be assessed.
But we do know the News Corp Australian papers lost nearly half a billion dollars in revenues in the year to June 30, and the weakness has continued. Fairfax Media has seen a slower, but still painful fall in revenues from newspaper ads.
 There’s no definite figures yet on the success or otherwise of the Sydney Morning Herald and Melbourne’s Age’s decision to go tabloid and move behind a paywall earlier this year. |
According to the 2013 annual report, Fairfax’s online businesses are profitable.
But The Australian Financial Review is struggling and needs cost cuts and a revenue boost, which Fairfax revealed when it moved to close its glossy Sydney and Melbourne magazines and sack 45 journalists. Part of that was going through with the confusing merger of the Business Day websites (for the SMH and Age) with the AFR. That will lead to a loss of staff and focus.
It is contrary to the way the FT is heading – realistically Fairfax should be chopping back on the print edition and boosting the AFR’s website operations to make appealing to more than just big fund managers, brokers and high net worth investors.
APN is still struggling with its survival and really needs to exit its NZ businesses (as does Fairfax).
But all should heed the message from one of the world’s great newspapers – that the days of ‘The Pink’, as the FT is called, are numbered insofar as its print editions are concerned.
