Not so long ago the newspaper and broadcasting industries had little in common. Of course, both were in journalism but the business models were starkly different - print bosses paid attention to daily circulation figures while TV news heads pored over last night’s evening bulletin audiences. And sales teams were at pains to stress the differences between newspapers and broadcasting.
The arrival of the digital age changed all that and dragged legacy print and broadcasting news players into the same arena where they found themselves not only competing with each other - for audiences and revenues - but also with digital native publishers and other small start-ups, some of who quickly grew into giants.
For a while, coexistence seemed possible and although newspaper sales and TV/radio audiences went into irreversible decline these reductions were offset by the rising popularity of news websites and other digital properties. Not everyone found this an easy transition but one upside of this unexpected convergence was that news broadcasters could look at and mimic successful strategies being deployed by others beyond TV and radio.
More recently, digital news outlets of all kinds have been confronted by a new challenge - one which almost everyone shares: the quest for online audience growth. Digital take-up and new device adoption have slowed to almost zero, audiences are fragmenting and, perhaps most troublingly, some audience segments are avoiding news altogether. Moreover, the realisation is growing that gross audience reach is little guarantee either of editorial impact or commercial success.
The Financial Times embarked on a process of transformation almost a decade ago to respond to these developments in pursuit of a more secure financial future. This led to a much deeper understanding of audience behaviour and the introduction of metrics such as quality reads and RFV (recency, frequency, value) as more insightful gauges of impact. Audience growth remains an overwhelming priority, but it is now tracked in a more nuanced, meaningful way.
The commercial corollary of the search for audience growth was the evolution and pursuit of a diversified revenue model. The FT is proud of its success in achieving a subscriber base of more than 1.25m but in no way has this meant jettisoning advertising revenues. Key to recent commercial success has been achieving alignment between advertising and reader revenue, as evidenced by the fact that digital advertising revenues have grown substantially - in fact, they have doubled in the last three years - hand-in-hand with growth in the subscription business. It’s not an either/or thing.
Beyond these two revenue sources the FT - in common with others - has actively nurtured other sources of revenue in areas such as live events and specialist B2B publishing. Each of these brings important incremental revenue and also de-risks the business model overall. As operating margins in news remain thin and uncertainty seems only to increase, a diversified revenue mix creates a platform for confidence about the future.
Legacy print publishers and legacy news broadcasters are not the same, but they share much more in terms of strategic challenges and opportunities than even a decade ago. Our consulting team at FT Strategies draws on the experience of the Financial Times and also a track record of success in advising hundreds of news providers around the world in developing and helping to execute real-world strategies for print, broadcast and digitally native news companies alike.
To find out more about what we do and the industry experts who work for us please contact us here.
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