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Journalism - The Independent (13 December 2004)

The financially smart move

Newspapers have to replace falling print revenues with online income - and the FT is first to get to the phone


By Kieren McCarthy

 

One of the biggest buys this Christmas - especially among execs - is expected to be the new generation of "smart" mobile phones, which let you run sophisticated computer programs on a normal-sized handset. It is a fact that hasn't passed Nigel Pocklington by. As the new director of online publishing for the Financial Times, he sees the opportunity to sell the paper's content everywhere. "It's early days yet, but given the way devices are going, we will soon be able to sell a coherent add-on that will give you more than just alerts; that will give you some sort of FT.com experience."

He's talking about instant, personalised market data and news sent directly to your phone. And he has already signed deals with Nokia and Sony Ericsson to provide just that. The beauty of it is that the people who want - and will pay for - the content are the same people likely to have the technology that makes it possible. "We are often a business-bought product, and BlackBerries especially are corporate-bought." And so another string is added to the bow of selling newspaper content to a modern, highly varied and promiscuous media market.

The fact that the printed newspaper market is in decline is something that even the most Luddite commentator now accepts. But that doesn't mean the information-producing businesses behind them are going to lose out. Recent figures show six of the top 10 news websites in the UK are online versions of traditional newspapers. Only internet giants Google and Yahoo - neither of which produce original content - can get in among them.

The challenge is to replace falling print revenues with online equivalents. Which is why the FT decided last month to create a new board-level position for online. "It's recognition of the importance of the internet - that it reflects a bigger part of the business and a larger part of the revenue," Pocklington explains.

There won't be a radical shake-up of FT.com, but Pocklington now has a seat on the weekly management meeting, "which means I'm closer to the decision-making, I can raise any concerns quickly, resolve problems faster and generally put online at the heart of the business". The overall result will be "an increase in the pace of change" - precisely where the online newspaper battle will be fought and won.

Because of its niche position, the FT has done particularly well selling its two-level annual subscription (£75 a year for the FT package; £200 a year to include third-party information). But much of its content remains beyond the reach of the casual viewer and so Pocklington is looking at new charging models to turn visitors into subscribers. In particular, tapping into what the internet can give that printed newspapers have never been able to - large quantities of overseas readers.

In the meantime, UK readers will benefit from a range of small changes to the FT.com website. But the FT will not be going the same path as other UK newspapers. No separate Times-style archive, and the digital edition will remain just a copy of the front and back pages, rather than the entire paper.

This is a sign of a maturing online newspaper market, the director of UK Association of Online Publishers, Alex White, tells us. "With nationals, there is a big overlap in that they are all reporting daily news, so in terms of charging, it is really important they focus on what makes their product different and what readers are not able to get from the others," she says. "With The Independent, that's the columnists and I think the Mail is doing that too. With The Times, it might be their crossword; with The Guardian, maybe their wrap of weekly news." Charging for daily news remains the Holy Grail, but no one should expect that any time soon.

In terms of approach, The Times and The Guardian stand at opposite ends, but both take the internet seriously. "Online is part of our daily lives now," says The Times's digital director, Annelies van den Belt. "What we try to do is make it an extension of the newspaper." She highlights the recent addition of a women's channel on the site: "It combines and aggregates all female content that we produce throughout the week. In the newspaper, we don't have a female section but online allows us to unbundle and rebundle content to add depth and breadth."

As for new products, "we are launching [them] every day," Van den Belt says. Although this is News International and so, of course, "we are focused at controlling cost".

As director of digital publishing at The Guardian, Simon Waldman has a more free-ranging approach to the internet. "One of the things you should always do on the web is amplify your strengths," he says. "But the real issue is not about sitting here as newspapers and saying, 'What shall we do next?' You have to look at how the net is evolving as a medium."

To this end, The Guardian is pushing its blogging efforts and RSS - Really Simple Syndication - which put news and other information in a common, easily readable format. RSS technology is now included in some internet browsers and soon expected in e-mail software.

But in terms of newspapers on the net, "we are barely learning to walk at the moment", Waldman says. The Guardian's more creative approach has resulted in it becoming the UK's biggest newspaper online. But whether that greater market share can be translated into larger real revenues and profits in the future remains largely unknown.

However, like the FT's Pocklington, Waldman and Van den Belt agree that mobiles will become an extremely important part of the online newspaper future. In this one aspect of the rapidly changing and expanding market, the FT would appear to have the edge. Until, that is, Times and Guardian readers start buying smart phones.

 

Link to this story on The Independent


 




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