Financial Times editor Lionel Barber has been telling Channel 4 News why news organisations have to act now and charge for online content and how they can do it like the FT. Not sure about that one.
Timing is everything and it’s striking that the Financial Times is talking paid content in the week that Guardian Media Group is openly discussing closing the Observer.
The FT, of course, is in a unique position in British press journalism as it already charges for online content. It has 117,000 paying web subscribers – although only 10% of those registered on FT.com pay (like me). The rest view articles occasionally, but never take it any further nor will they (like me).
To begin, Barber says that the biggest mistake the industry made in the past ten years was not to charge users. He says the media was seduced into believing that information was free. Oh sweet seduction.
“We thought that as news organisations we could put our material out on aggregators like Google, attract a big audience and sell advertising on the back of it. In fact what we should have said is: ‘No, information actually has a price – it’s valuable and therefore we should charge for it.’” he told C4 News.
20:20 vision in hindsight is a godsend, but like the downturn itself no one saw this one coming. At the time free content looked like the logical way forward. The formula of: wide open digital spaces + large audiences = advertising revenues made sense.
Barber justifies his position by pointing to the fact that there are many other sources of free financial news that compete with the FT – such as Bloomberg (you could add Reuters and the BBC). His argument being that despite free content a strong authoritative brand can still win through and establish paid-for barriers.
“In order to adapt to the FT process news organisations will need to have a unique selling proposition – what is it that makes some news organisations special? We think we’ve been a pioneer in the way we’ve established a frequency model charging online [we assume Barber means the limit on the number of articles per month non-paying users can access].”
I think the FT has been (and I’m not knocking it) lucky. It almost reversed out of charging a while back as Rupert Murdoch made noises about making the Wall Street Journal free. Had he done that (more hindsight) then I doubt the FT would be in the position it is now in. Maybe more importantly Barber believes the online “mistake” of free content can be reversed and within the next year many news organisations will be charging.
“I think people are beginning to change but it’s up to us news providers, the content providers, to make that case. I think there is an inexorable momentum behind charging for content.
“For the simple reason, that (1), the advertising that we relied upon isn’t going to come back in the same way, and (2), that everybody is simply just realising this new internet age, that they need to actually charge for content and establish content as something valuable.
“What I would say to the competition and to the rest of the world is that it’s getting late. If we move now we can assure ourselves of a prosperous future.”
Barber is right about some of what he says, but he is wrong about the most important bits.
Yes, there is an inexorable momentum and yes advertising isn’t going to come back, but he is wrong about the FT being a model for anyone else other than the FT, which is itself a weaker model of the Wall Street Journal, which has one million plus subscribers – ten times more than the FT.
Those two papers exist in a subset, in their own self-contained paid content sphere, and their model is just that. Their model does not apply to general interest newspapers such as The Guardian, The Times or for that matter the poor old Observer. There’s no way back. The genie hates the bottle.
We already know people will pay for specialised news (for B2B, financial news) that they can’t necessarily get elsewhere. Bloomberg and Reuters like Barber says do pump out a lot of stories, but that isn’t the FT’s strength, which comes from its authority and its position in the marketplace and its commentary. That’s why people pay. At least that is why I think they pay.
I’m not sure where this “prosperous future” that Barber talks of lies. At the moment it looks like only select parts of the bulk of national newspapers could in anyway be charged for. There is simply too much that is free already.
Barber also talked about micro-payments and I’m sure that people will try this along with various other experiments. It is going to be a case of trial and error.
Read more on Welcome to planet FT or how you can charge for content like the pink’un…