Social media is young and its impact on news publishing is still unfolding. It’s unlikely that sharing and commenting will be the only major trends to emerge from the social revolution. News publishers, already beset by extraordinary change, must prepare themselves for more challenges on the road ahead. As social media becomes increasingly central to people’s digital lives, news publishers may find that they have to push their content out onto social platforms in order to reach their audience. This could shake digital revenue models and disrupt publishers’ traditional role as packagers of content.
Digital has undoubtedly transformed news publishing, but there’s much that remains unchanged from the days before the internet. Editorial teams still devote their energies to the essential tasks of gathering news and packaging it for the reader. Commercially, the focus continues to be on the age-old businesses of advertising and subscription. At a more basic level, news publishers still operate as destinations and they need the readers to come to them in order to make money.
The proliferation of digital channels is already making it harder for publishers to sustain that model. Readers that migrated from print to desktop are now spilling out across smartphones, tablets and eReaders in increasing numbers. As a result, many publishers are finding themselves struggling to generate revenue from fragmented audiences spread across many formats.
At the Financial Times, we recognized early on that the continued success of our business depended on our ability to adapt to changing reader habits. Our response to audience fragmentation was to create a multi-channel subscription model that allows our subscribers to move easily across formats at their convenience. A single log-in and password gives access on desktop, tablet and smartphone at any time.
This focus on flexibility in the face of fragmentation has paid dividends. Digital now represents over 30% of total FT revenues and with over 300,000 digital subscribers we have now reached the point where we have more digital subscribers than print circulation. Our channel-neutral strategy has proven digital to be a supplemental source of new FT subscribers, and this year the FT reached a total paid circulation of 600,000, the highest circulation in our 124-year history and rising.
We believe that this ability to adapt will continue to be vital to our success because there are undoubtedly further shifts in reader habits to come. One of the most important factors is likely to be social media, which is challenging the fundamentals of news publishing by tying readers up elsewhere. One in six internet minutes is now spent on a social site of some description and the proportion is rising.
Increasingly, social media is an access point and nexus for online pursuits. It’s exerting a gravitational pull that’s dragging other types of web activity into the social realm. News is no exception and the big players in social are developing smart ways for people to share and consume news on their platforms. In addition, social aggregation apps are proliferating that allow readers to easily create a personalized news experience by mixing content from many sources and contacts.
The focus on news content within social media proves that news remains powerful and in greater demand than ever. However, what does it mean for publishers if readers stay away from their curated packages and pick-up their news elsewhere? At the moment, news publishers have little capacity to turn news consumed on 3rd party social platforms into dollars. With their businesses already under pressure, it’s a headache that publishers could do without. But if a trend towards off-site consumption does take hold then it may be impossible to ignore.
For the FT, this problem has a familiar look to it. Some years ago parts of the FT audience began transferring their reading to B2B aggregation platforms such as Factiva, Lexis Nexis etc. The aggregators were offering corporate customers the ability to mix multiple content sources in a single interface and customize their reading with numerous tools. This had big implications for the FT’s business from corporate clients especially as it was obvious that readers valued the service that aggregators provided.
The scenario called for a new business model that embraced the change in reader habits. The solution was an innovative, flexible content license for corporate customers that allowed them to consume FT content on any one of 40 authorized 3rd party platforms. Since its introduction four years ago, corporate license revenues have gone from strength to strength, with corporate licenses up almost 40% year on year to nearly 2,300. Helping readers get what they want is good for business.
With social media and social aggregation apps on the rise, publishers need to show the same type of flexibility in the B2C market. As more individuals shift their reading onto social platforms, resisting changing reader habits isn’t likely to be a winning strategy. Instead, publishers need to find smart ways for their content and their business to move with the audience.