Financial Times chief executive John Ridding has said news publishers “can have your cake and eat it” but only if they have a “robust reader revenue foundation”.
He said the coronavirus pandemic had “accelerated the essential elements of news media success strategies, aka digital and reader revenue”.
Ridding told Deloitte and Enders Analysis’ Media and Telecoms 2021 & Beyond conference on that publishers do not have to choose between advertising and subscriptions as there is still “strong growth” to be had in both revenue streams.
He said the FT’s digital content revenues are now bigger than all its other revenue streams combined and more than three times print advertising, which is the next biggest.
He also revealed digital advertising revenues at the FT were up by 30% in 2020 and overtook print in the final quarter of the year.
“A moment, and a milestone, and not a coincidence,” he said. “Rather it’s the result of deeper audience data and, as a result, an increasingly effective marketing proposition. So it isn’t ads versus subs – there is strong growth to be had in both.
“I don’t quote Boris [Johnson] often, but you can have your cake and eat it. Crucially, though, only if you have a robust reader revenue foundation.”
“What does that mean for those like us who paddled early into the wave of change?” Ridding asked. The FT first launched an online paywall in 2002 and now has a combined print and digital subscriber base of about 1.1m.
“It means news media can be a growth story,” he said. “For others who left it late and chose to focus on scale, reach and advertising it involves casualties and consolidation. We saw that last year with the retrenchment of some of the main challengers from new news media and we’ll see more this year.”
Ridding was speaking before Buzzfeed announced plans to make cuts at its newly-acquired former digital media rival Huffpost in the US (47 jobs affected), UK (16 jobs at risk), Canada (23 jobs) and Australia (an unknown number).
Last year Buzzfeed closed its own dedicated domestic news operations in the UK and Australia, with some staff retained to cover global news for its US audience, while business news website Quartz was another forced to make major cuts because of the digital advertising decline.
Ridding said two major advantages of being a legacy newsbrand during a time of crisis like the pandemic are trust – both within the organisation and among readers – and culture.
“But it takes time, hence the legacy dimension,” he said. “A lot has been written about culture in organisations and much of it is waffle.
Ridding said he defined organisational culture as “how people behave when no-one is looking”. He explained: “Well, in that respect this pandemic has been a giant laboratory test of culture. No one was looking because no one was there, unless you had some creepy spy software.”
Ridding said building trust with staff was why the FT was able to put temporary pay cuts in place during the pandemic.
In December the title announced plans to cut up to 64 staff, including up to 20 in editorial, due to the blow to advertising and events revenues during 2020. FT Group, which is owned by Japanese media company Nikkei, expected to make a small loss in 2020 compared to an operating profit of £28m in 2019.
Ridding said being privately owned had nonetheless proved useful during the pandemic.
“The past year has not been kind to publishers seeking to support or maximise quarterly results,” he said.
“Private ownership that enables a longer-term perspective and to see through the crisis is a key competitive advantage. Nikkei, our owners, are on the other side of the world but they were right behind us through the crisis, sustaining investment in the growth engines of digital subscriptions even though that meant a short-term hit to earnings.”
Picture: Reuters/Benjamin Beavan