Pearson, the parent company of the FT Publishing’s FT.com, recently reported quarterly earnings. PaidContent.org has good coverage and analysis of what’s going on.
First, for the positive metrics:
—Free FT.com memberships rose 211 percent to 1.4 million (just 12,000 in 2007). Average monthly uniques up 60 percent to 9.8 million.
—Paying subs up 18 percent to 117,000+.
—Online now makes up 67 percent of FT Group revenue.
—Worldwide print circulation down six percent to 421,429 (ABC). UK print readership up 15 percent to 417,000 (NRS).
From that perspective, things are looking pretty good. Now, for the bad news (a la PaidContent.org):
Free and paid subscriptions are still growing, but not by enough to keep Financial Times profits in the same direction. FT Publishing’s January-to-June operating profit crashed 40 percent from last year to £14 million ($23 million), on 13 percent worse revenue of £176 million ($289 million). But at least it’s still in positive territory.
FT has been weening its revenue mix away from advertising and toward subs and digital since 2000; it’s slimmed advertising’s contribution from 25 percent last year to 18 percent today. Nevertheless, it’s precisely the advertising crash that has hurt it this time, blaming “tough market conditions for financial and corporate advertising, as expected”.
So, interesting to see — hard to really decipher everything without seeing more but it appears that the FT.com is very attractive from a user’s point of view. The FT is doing great content marketing and the delta in free user subs is awesome. FT has also done a good job diversifying away from advertising — so, that’s probably helped some.
The problem though is simple: it’s great to be able to content market the crap out of a great product but if the monetization engine can’t keep up, it’s a losing proposition. It’s like trying to make up on volume what you lose on every sale. I don’t know if this is just a mid-cycle thing or that the FT.com faces many of the same problems traditional newspaper websites have (too much cost, too little revenue).
Additional Resources:
- Slides from Pearson’s earnings meeting
