Financial Times chief executive John Ridding has pointed to three early decisions he made that have had a lasting impact on the health of the newspaper group.
Ridding also shared his approach to two of the current issues facing the industry: appealing to younger audiences and the widening implementation of generative AI.
Speaking at the News in the Digital Age conference in London on Tuesday hosted by FT Strategies, Ridding reflected on the “very strong position” the business is now in, having reached its highest-ever revenue of £500m revenue last year.
He added revenue “will be more this year”.
“But it’s been a bumpy journey to get there,” he said, reflecting on the “key phases of that journey” which happened “early on”.
In around 2006 and 2007, he said, the FT was “kind of losing money-ish, and if you’re the FT that’s not a good look”.
Decision one: Charging for content online
The first key moment, he said, was the decision to begin charging for the FT’s journalism with its first online paywall in 2002, then a metered model from 2007 and a paid-trial-led model a further eight years later.
He said: “We decided, and I decided, that we should really charge for content online, which sounds kind of obvious now, but at the time was kind of radical and met with resistance. I remember going to California to explain this to some of the tech platforms, and they were actually pretty angry. It was ‘the internet wants to be be free, what are you doing?’
“So that pivot to charging for journalism online because underpinning everything was a belief in the value of journalism that the FT newspaper produced.”
He added that he had not realised at the time that “even more valuable, in some respects” than the revenue that came as a result was the “data, the audience insights, the engagement – you build the understanding and relevance”.
Decision two: ‘Owning the customer’
Ridding said the second key decision was to make sure the FT was “owning the customer”. Previously it had sold its journalism to companies through aggregators like Factiva, Lexus Nexus and Dow Jones but Ridding wanted to “take back control” and said “we will have a direct relationship with all of our institutional customers”.
He recalled “two years of pain” as they let go of “millions of pounds of high-margin revenue because we thought the opportunity was much bigger. Now that was a big roll of the dice which has really paid off”.
[Read more: FT reveals how it plans to grow B2B subscriptions yet further]
Decision three: Putting the price up
The third key early decision was to increase the price of the FT, something which Ridding said met with more resistance from inside the company than outside.
At the start of 2007 the FT’s daily edition cost £1 and by the end of 2008 it cost £1.80. The daily newspaper now costs £3.50, with the FT Weekend on £5.10 and a standard digital subscription is £468 per year – the most expensive in the UK.
Ridding recalled: “I remember sending a note to all staff saying ‘dear everyone, the FT’s been £1 for five years, we’re kind of losing money, our journalism is worth a lot more than that so we’re putting the price up’. I wanted to go straight to £1.50, but I was persuaded just to go to £1.30 so the world didn’t end, then go to £1.50.
“So I sent this note out and of course, one of the things I love about the FT is we have a very challenging newsroom, as you’d expect, and within about three seconds, there was a reply saying, John, not even Dear John – this is somebody I think I hired as well. ‘I hope you know what you’re doing’, which is code for ‘you don’t know what you’re doing’. ‘We will lose sales, advertising will fall’… I didn’t do much management training, but the one thing I learned from a mentor was never write an email when you’re angry. So I walked around the room 20, 30 times and wrote ‘hey X, let’s see’. I think our journalism, which you produce, is extremely valuable.”
In the first month or so he received about 12 complaints from readers and responded to all of them explaining that “running a global news organisation is a complicated and expensive business” and doing that for less than an a Starbucks espresso is “pretty good”.
Ridding added: “But I think even though they were early moments, those principles inform everything we’ve done since: the direct relationship with the readers, understanding what they do, being confident about your journalism and pricing it accordingly.”
FT needs the next generation
Today, Ridding said, one of the biggest challenges for the FT is creating a meaningful, direct relationship with audiences under 30.
He described it as “one of two key issues” to be discussed at the FT’s annual senior management strategy meeting being held next month.
“It’s obvious why we’ve been around 135 years. If we’re going to be around another 135 years, it’s quite important that we have readers, we have new generations who engage with the FT, and I think for the industry as a whole it’s crucially important.”
Ridding cited the competition for time with the likes of social media platforms and games, which means news is “struggling to get a look in”, as well as the documented rise in news avoidance.
He said the FT has “a number of approaches in train and under consideration” including:
- Being “where the readers are” so on Tiktok with explainers that are proving “very successful”
- Data journalism (articles by John Burn Murdoch “are really striking a chord”)
- Strengthening audio and video
- Continuing the FT schools programme, with free access for students aged 16 to 19.
Ridding said the hope is that one day those students will pay and it is about “making sure that they appreciate good journalism, that they connect with brand”.
John Ridding on AI: ‘We’re still in the foothills’
Overall Ridding said he believes that “quality media done right is a quality growth business” but said AI is “another phase of the series of challenges that we’ve all faced.
“And a lot of the principles in terms of the response are the same, which is, you can’t ignore this. You can’t turn your back on it, you have to try and understand it, embrace it…”
In April the FT became the first UK-based news publisher to have announced a partnership deal with ChatGPT creator OpenAI and it has since also licensed its content to lesser-known start-up Prorata.ai.
[FT CEO: News orgs ‘have leverage and should insist on payment’ from AI companies]
Ridding said we are “still in the foothills of what is clearly going to be possibly the biggest ever series of tectonic disruption driven by AI” for the industry and said the biggest risk is disintermediation – people getting information, distilled from news providers, via AI platforms without going to the original source.
But he said the “doom loop is probably overstated”, citing research that suggests that “if AI trains on AI, after two or three generations the output is nonsense. So I think there’s a recognition increasingly that they need accurate, humanly well-reported, authoritative coverage to train these platforms.
“So I think there’s big opportunity there, whether it’s through licensing, whether it’s through partnerships. I think there’s lots of other opportunities to do with optimising business models using AI predictive analytics to increase and improve acquisition, retention, churn – all the hard science that’s part of a successful dynamic subscription model.”
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