The Times are Good

After 125 years the FT remains an institution to envy, not copy
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In February of this year, the Financial Times marked the 125th anniversary of its first publishing. For most industries, such an occasion would pass with little fanfare. Not so for the crisis-prone newspaper business. The anniversary of one of the industry’s icons served as an opportunity for the FT’s peers to express both their admiration and envy for its continuing success. One look at the story of how the niche financial paper became a staple in the most influential circles and it is easy to understand their reverence.

Unlike its peers, the FT drew a clear line in the sand early by erecting a paywall in 2002, implicitly valuing their content above peers who chose to give it away for free. In addition to some brilliant foresight, to evoke the infinitely quotable Clintonism, it also took some serious brass. Breaking down the institutional barriers between the legacy print and nascent digital operations to function as a single unit has been paying dividends ever since, while continuing to plague the FT’s rivals elsewhere. You can draw a direct line between this structure and the FT’s ability to stay the course with their digital first strategy, even when they too suffer the ills of an industry’s fading fortunes.

The envy is truly well-deserved.

But efforts to draw lessons and recipes for success from the FT experience, as numerous commentators purport to do, should come with an important caveat. The FT’s case is unique. Not just unique in the sense that they carved out a strong, profitable niche (they have) or that they avoided many of the legacy issues that their peers do (they do), but instead that there are some characteristics of the FT’s business that are exceeding difficult to replicate. That is, if they are possible to replicable at all.

Style

During the age of print’s monopoly over news, each of the world’s most powerful newspapers linked its value proposition directly to the scope of their coverage. The New York Times’ mantra of all the news that’s fit for print, for example, was not a creed for curation but, rather, collection(1). But in modern times, adherence to such scripture is impractical. In an age where there is no limit to the content that’s available, despite traditional newspapers seemingly clinging to the contrary, there is limited value in making a doomed attempt to synthesize all of the world’s information. That is before one even considers the operational limitations of doing so on a daily basis. Instead, in the face of information overload, what’s truly needed is someone to make sense of it all. This is where the FT steps in.

Certainly the FT has its purely reporting and informational pieces as well but, more so than almost any other English daily (with the possible exception of the NYT), its pages are dedicated to opinion and commentary(2). At face value, it’s a risky proposition to assume a position of authority to comment on the day’s events. Yet through the careful cultivation of the individual brands of its most prominent reporters like Gillian Tett or Martin Wolf, the FT has amassed a stable of credible and often beloved commentators whose readers will follow their every move. This too carries with it some risk – witness the Daily Beast’s experience with Andrew Sullivan – so the FT has been careful to ensure that its brand has always grown alongside its powerful ambassadors to ensure readership long after their departure. The FT has skillfully personified itself not as a source of a selective few producing great commentary but instead as a great many producing selective commentary.

Such a barrier is certainly not insurmountable for rivals: the arms race for talent to fill the pages with editorial content is an ongoing one in the newspaper industry and merely needs a thick skin and a willingness to spend. Yet the FT brand is the barrier that makes it hard to compete. The trust they have with their readers, which ultimately allows them to reach the full economic potential of their editorials, is easy to breach but hard to build or maintain.

Content

One of the ways to become that trusted advisor is focus. Just as globalization has forced specialization on the average worker, so too has the internet spawned the revolt against the generalist newspaper. Presented with so many more options, readers have identified their clear preference, through the prevalence of aggregators, for acquiring their news from a variety of sources. Blogs in particular, once dismissed by traditional news organizations as the epitome of noise on the web, have become a highly valued source of content given their propensity for specialized expertise.

It flows logically – and is hopefully painfully apparent – that clearly the FT has made a wise strategic move by setting their sights on the business reader. As a group that can point to the tangible financial benefits to the news they read, they’re most likely to be willing to bear the cost. This is a powerful proposition for employers as well, who are increasingly taking advantage of corporate subscription offers. These companies reap the reward of more informed workforce, while the FT locks in another competitive advantage through these often enormous and “sticky” relationships.

What’s more interesting, however, is that the FT’s segmentation goes one layer deeper. Unlike other business news publications such as the Wall Street Journal, whose focus includes individual stock and financial planning tips aimed at the small investor, the FT’s content focuses on particularly high-level issues that target the upper echelons of business executives; such as the detailed coverage of fiscal and monetary policy or global economics. Even non-business content shamelessly flaunts stories or advertisements for expensive Swiss watches, extravagant Parisian fashions or brash Italian cars that are far out of reach for your average business news consumer.

Ultimately, the lesson is not just to pick a content area ripe for detailed commentary as many have tried. Instead, the problem needs to be approached backwards by thinking about a clearly identifiable, differentiated and somehow underserved customer and then to be uncompromising in your pursuit of their editorial needs.  In doing so, it wouldn’t hurt to pick a reader who’s highly affluent, influential, and willing to pay, either.

Geography

Perhaps the most underappreciated part of the FT story is the benefits it accrues as a simple byproduct of being on the threshold to Europe. The British press has always benefited from its former global power status: few corners of the globe were out of reach for the empire, giving their papers the first opportunity to present truly global coverage. But even with the empire now long-gone and British influence no longer hovering over the day-to-day lives of billions, there remains a unique advantage to its position as the Anglo-speaking world’s representative in Europe. For decades, Britain’s banks have used their linguistic and cultural similarities to link yield hungry American investors to their capital starved neighbours on the continent. This is why, even in the face of turmoil throughout its financial system, the City is poised to remain one of the world’s banking capitals.

The FT’s experience has mirrored this advantage. Through the work of institutions like Britain’s banks, capital is now global and it’s been critical that business and investing information keep pace. By taking a decidedly Euro and business centric focus to its content, the FT has effectively captured this niche; its content is beloved by the world’s business elite as a result.

This particular ingredient in the FT’s recipe for success is perhaps the hardest of all to replicate. An eager competitor would need to find an equally enticing “cultural crossroads”, with capital on one side desperately searching for investment opportunities on the other, that just so happens to have its own dearth of English-speaking coverage. Such opportunities exist (3), but not all of them have the advantage of being a former empire.

So what can we learn from the FT’s story? Plenty. They picked a content strategy that aligned with their available resources and stuck to it. They integrated the disparate bureaus and pieces of their newsroom into a single unit, aligned by a common purpose and set of objectives. And at every turn, they’ve been proactive in addressing potential future problems – even if that means upping their nose at the world’s most influential media company.

Still, attempts to copycat without the same incumbent advantages is folly. The FT has staked a claim to the financial and journalistic landscape, and while they’ll continue to be courted into partnership endlessly, it’s not a niche they will be ready to share.

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(1) In one infamous incident, Adolph Ochs, the legendary New York Times publisher and owner, complained loudly whenever his rivals included a horse race result that his reporters had omitted.

(2) Newspaper apologists (including myself) will argue that there is still value in the digital age of a single source of truth. This is perhaps even more prevalent given the commitment to misinformation of some of the more dubious sources. The fact here, however, is that the market has shown a willingness to pay for value of commentary, not generic news updates.

(3) Personally, I believe there may be opportunities in Asia for a dedicated, full-service bureau that reports English language news.


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COMMENTS
  • Michael Zawalsky

    This was an excellent article – I found your point about corporate subscriptions particularly interesting – I would say; however, that you undersold the value of these subscriptions. As you rightly indicated, these are very sticky relationships and are easier to manage than individual customers. Corporate subscriptions are a key driver of performance for FT – 40% of digital subscriptions coming from corporate customers (100,000).

    Not only do corporate subscribers insulate FT from variability, but I would argue they represent a key growth area. FT has the ability with corporate subscribers to more clearly segment their population into main coverage areas that each client is looking for and invest resources into producing content that is tailored specifically to covering client needs. In effect transitioning them further from a traditional newspaper to more of a research institution. As they increasingly deliver information that is crucial for doing business in specific industries all corporations in the space are forced to sign-on their employees in order to remain competitive (perhaps it’s not linked quite so neatly – but I would still argue the high-level trend).

  • Will Meneray

    Glad you enjoyed the article Mike!

    I think your extension of my passing mention on the corporate subscriptions is a good one. It is perhaps THE best example of how they’re can extract value from individuals who realize tangible, economic benefits from their product.

    To me, the real “jewel” they can capture is to start using these subscription relationships to infiltrate the lucrative corporate data market. I know the Globe and Mail does this, but it’s capabilities and reach are obviously far more limited than a global brand like the FT.

    Bloomberg and Reuters have obviously built themselves in the opposite direction – starting first with corporate data services and then extending into editorial. To me, there are potentially greater advantages to doing it the other way around – as the FT’s content is ideally less commoditized than Bloomberg and Reuter’s data services are.

    You can also see why those two media giants are perpetually interested in acquiring the FT – per my link at the end of the article – as it would be a real shot to the arm for their media properties that would be exceedingly hard to match.