If something is not worth paying for, is it worth doing, asks FT CEO

The £383-million media house, The Financial Times, has been on a roll ever since the Japanese Nikkei acquired it in 2015

In April this year The Financial Times (FT) crossed a million paid subscribers, one year ahead of schedule. About three-fourth of these are digital. The £383-million media house has been on a roll ever since the Japanese Nikkei acquired it in 2015. FT has been picking up all sorts of firms in events, data analytics or video to step up its digital offering. It is now relooking at India after a failed attempt in the early part of the millennium.
 
Vanita Kohli-Khandekar spoke to FT’s Chief Executive Officer John Ridding in his office in London. Edited excerpts:
 
 

There is talk of an India launch for FT.
 
India is a very important market strategically. We are fascinated by the potential of the Indian economy. Also, we have resolved (amicably) the issue of the use of our masthead with Times of India last year. That allows us to use FT.com and our digital brands in India. I will be going out there in October. Currently, we are talking to potential partners.
 
Are you looking at a local edition?
 
We are a global publication, global is in our DNA. In a dynamic, competitive media scenario our
value addition is bringing global news and analysis.FT is largely subscriber based, and India is not a big pay market.

 
We believe in the reader-revenue model. From a journalistic perspective having that proven relationship with readers is central for our purpose and our business. Our belief going back more than 10 years is that advertising alone will not sustain quality journalism. And our view has been vindicated. (FT was among the first brands to introduce a paywall in 2002). Media organisations that have tried to grow and survive on digital advertising have found it difficult. If you have strong revenues in pay, there is a strong chance of getting advertising. Therefore, we are confident of our pricing. But we also need to be sensitive to market conditions. Our view, under Nikkei, is not about profit maximisation. Therefore, we are not looking at quarterly earnings. This enables us to take a long term view. And it is technologically doable, you can segregate markets.

 
Is subscription workable only for specialised/business publications like FT or The Wall Street Journal?
 
I don’t believe that you can only charge if it is some kind of business publication. The Guardian (a general paper) is an example of the reader revenue model. It (The Guardian’s success in getting readers to donate) says that readers value news and information, that everybody should be served quality journalism. The issue is it has to be worth paying for, there has to be a point of differentiation. And if something is not worth paying for, is it worth doing?
 
Advertising cannot sustain you because you can’t beat with Google and Facebook on reach. Publishers who don’t think of reader revenues have a difficult time. There is a need for publishers to develop reader revenues. The barrier is technological expertise. There is a lot of hard work involved in building your readership (on digital) and you have to be thoughtful of GDPR (General Data Protection Regulation, a European Union data protection law implemented in 2018). You need expertise in areas like churn, retention. Once you get it, it is a virtuous circle.

 
How much does the editorial filter matter and how much does data?
 
Data matters but editors matter more; skilled editors’ job is using judgement. Newsrooms chase data, we don’t. We set the agenda; therefore, we need to be ahead of the data.
 
What role does ownership structure and business model play in creating sustainable, quality journalism products?

I am not sure there is a perfect model. FT is 100 per cent owned by Nikkei, which is 100 per cent owned by its employees. Therefore, we are able to take a long-term view independent of corporate pressure. It is long term plus business performance, so we have to walk the talk. Whether it is subscription or membership, it allows

you to develop brand loyalty.
 
Your view on platform dominance (Google/Facebook), fake news and polarisation?
 
I don’t have a problem with what platforms do, but they made life unnecessarily difficult for quality journalism. The way platforms operate makes it difficult to sustain. The way stories are prioritised, sensationalism sells and the incentive is to have news that can spread. What’s news is scale with bots and troll farms. The heart of the issue is how algorithms are designed – if they are designed for time, scale, and speed, they cater to sensationalism, people want to be titillated. Google is trying, but it is too late. It is great at organising the world’s information, but you have to make sure it is worth organising. Therefore, if it is fake we need to do better. 

 
Platforms are generally slow to waking up to these issues. Regulation has also been slow and lacking experience. The Congressional enquiry into Facebook was embarrassing. This is a global thing; traditional regulators are not equipped to deal with it.