Has FT.com Proven The Paid Online Subscription Model?

Coincidental to the subject of whether the Financial Times has been “proving that people will pay for valuable content” (see our previous item for the source of that quote), Mitch Ratcliffe speculates that the FT‘s newly expanded deals with Yahoo! Finance and MSNBC — sites where consumers can now access FT content without paying the subscription fees that the FT charges on its own site — means that syndication fees, and not subscription fees, are proving to be the better business for FT.com.

We agree. Although the Financial Times has signed up 55,000 paying subscribers — a number equal to about 11 percent of its newspaper print edition circulation — that is only 2 percent of the 2.7 million unique monthly users that FT.com had before it began charging subscription fees. (see our analysis a year ago at ClickZ about FT.com and other subscription sites). Yes, FT.com now earns at least US$5,225,000 (if all 55,000 site subscribers were to pay the site’s minimal rate of US$95 per year) and probably earns double that (because a significant plurality of subscribers might be paying the higher monthly subscription fees); but the fact that only 2 percent of FT.com’s user have decided to subscribe is far from proof that charging those fees is a success for the FT.

Did charging subscription fees cause a decline in FT.com’s traffic and therefore a decline in its banner ad revenues? We don’t know. If FT.com was able to increase its online advertising revenues by charging those subscription fees — charging advertisers higher ad CPMs to reach the qualified audience of paying subscribers — only then will charging subscription fees have proven to be a success for FT.com.

This entry was posted in Business Models, General Strategies. Bookmark the permalink.