Financial Times CEO John Ridding rejects dinner-party chatter that the publisher may be sold to Bloomberg or Thomson Reuters.
Instead, he is pushing the group toward a digital subscription future that, he reveals, will soon incorporate social networks. But Ridding will also have to manage a staff pay revolt and worsening economic outlook.
“My reaction was surprise,” Ridding tells paidContent, following Michael Wolff’s recent pot-stirring that Pearson (NYSE: PSO) could sell the FT. “Pearson are very much committed to the FT. If you look back at the big moments in our history, that’s been clear.
“We’re plugged in to Pearson in an increasingly direct way. We see significant potential for the FT and Pearson through education. We are developing tools for professors and students to annotate FT articles. Case studies in business school books are pretty old but, every day, the FT front page is an interesting business case study.”
The FT will also publish e-books through Pearson’s Penguin and Assanka, the web developer which FT Group recently acquired, will build direct-to-consumer products for Pearson’s education divisions, Ridding said.
Some analysts think Pearson, which is increasingly focused on education, should dispose of the FT.
Flight from ads
The Financial Times now has 267,000 paid digital subscribers despite coming off iTunes Store in a dispute last year. In the U.S., to where its online chief recently relocated, digital subscriptions have now overtaken print subscriptions. The group is quickening the pace at which it is reducing its reliance on advertising, with content revenues expected to overtake ad revenue in 2012.
“We are ahead of where we expected to be,” Ridding says. “Average revenue per user is £190.
“The world has changed, and not for the better. The Eurozone zone crisis has taken hold, advertising has become volatile and weaker. This is a pretty severe crisis for publishers. The thrust of our business model has become more prescient.
“The pace of transition has accelerated – what we need to get done has been compressed. It adds a sense of urgency. We’re focusing even more on digital subscription engines.”
Social and live online
Just as The New York Times (NYSE: NYT) opened its meter quota to social network referrals (a plan shortly to be followed by News Corp.’s The Times), Ridding’s FT plans “a whole series of innovations around engagement, personalisation, trying to build our presence across social networks and communities”.
“We’re talking about how we can get readers referring stories to their friends,” he tells paidContent. “We want to connect readers with each other and with ourselves. There’s lot of ways you can skin this cat.”
The publisher will also introduce paid online viewing for its premium conferences under the FT Live banner, launching on March 7 with the FT Digital Media & Broadcasting Conference, and plans a deeper push in to online emerging markets products.
The new features may be nice, but Ridding now has a pressing issue – FT journalists voted to strike on Monday in protest at a two percent pay rise proposal, when they heard group profits rose 27 percent through 2011 amid some redundancies.
“We’ve been a little surprised by that,” Ridding tells paidContent. “It seems unwarranted really.” Ridding explains the payroll is actually going up by 3.5 percent because the newsroom-wide offer of two percent is added to by an additional half-percent rise for staff earning below £50,000 plus an extra half one percent merit award. “The pay offer stacks up pretty well by industry standards,” he says.
The FT is trying to cut its cloth and redeploy staff to manage ongoing transition, Ridding says…
“We need more resources in digital. We listen to concerns – we want to explain the need to be careful with costs because we need to invest in the FT. The FT has been 124 years – we want to make sure we’re around for a lot longer.
“We have been simplifying our print edition structure to focus more on journalism and less on re-engineering of content between editions. Also, the whole balance of global business has shifted dramatically so we need more reporters in fast-growth economies like China and Brazil.
“We’ve managed to invest in the newsroom at a time when a lot of news organisations have been cutting back. We’ve gone from 550 to 600 in the last 18 months. We’ve also managed to reorganise and redeploy the editorial operation without any compulsory redundancies – which is somewhere between ‘unusual’ and ‘unique’.