Digging gold from data on subscribers

ERIC PFANNER
International Herald Tribune
03-07-2011
Digging gold from data on subscribers
Byline: ERIC PFANNER
Section: Media Cache
Type: News

Improvements in collecting and mining customer data were a big reason digital sales accounted for 24 percent of The FT's revenue last year, a big jump up.

For newspapers, connecting with readers is the ultimate challenge. At newsstands, many customers choose a paper only after they see the headline on the cover. The lady in hair curlers and a bathrobe might choose "Toe job to no job," to cite a classic from the tabloid Sun in Britain, while the gent in pinstripes might be grabbed by something like "China to tighten screws on state companies," in the staid Financial Times. Or vice-versa.
On the Internet, cozying up to readers is easier, because many of them willingly leave digital trails of their actions and preferences. Getting them to generate revenue is the challenge. But The Financial Times, the London-based business newspaper, has had considerable success at both of late, in part because it requires regular readers of its Web site to pay.

"We've moved almost from the dark ages to an age of enlightenment in terms of understanding our readers," John Ridding, the chief executive of The FT, said last week as the paper's owner, the British conglomerate Pearson, reported its financial results for last year.

When a reader signs up for an online subscription, The FT can track every click. That makes it easier to tailor content and new services to their interests. When customers let their subscriptions lapse, The FT can pursue them via e-mail and other means in an effort to get them to reconsider.

In businesses where getting to know one's customers has long been essential, this might not seem revolutionary. But Mr. Ridding said improvements in collecting and mining customer data were a big reason digital sales accounted for 24 percent of The FT's revenue last year, a big jump from 19 percent a year earlier and a considerably higher percentage than many other publishers can claim.

The FT, one of the few papers to charge readers successfully on the Internet, said it had 207,000 subscribers to its Web site and other digital versions of its newspaper, up 50 percent from a year earlier. It has also sold more than 1,000 corporate subscriptions to its digital content, and revenue from this source rose 30 percent last year, Mr. Ridding said.

While The FT is making a big push to generate more revenue from readers, better information on its customers has also helped with advertising, which rose at double-digit rates last year after a weak 2009, he said. Advertisers, no longer content with a scattershot approach, want to know more and more about their audiences: where they live, where they travel, what they read, what they buy and more.

The importance of customer data to media companies is reflected in a plan by one of The FT's biggest rivals, News Corp., to expand its presence in Britain by taking over full control of British Sky Broadcasting, the country's largest pay television company. One of the main rationales for that deal, which the British government last week said it was inclined to approve, is the possibility of cross- selling News Corp. media products and services to Sky customers, using that company's extensive customer records, analysts say.

Customer data are also at the core of a growing dispute between publishers and Apple over the terms of its new service offering digital subscriptions to newspapers and magazines via the iPad tablet computer or the iPhone. Not only does Apple intend to keep 30 percent of revenue from such sales, the company also plans to keep customer data to itself.

Mr. Ridding, who sees mobile devices like phones and tablet computers as one of the next big areas of digital growth for The FT, said customer data were essential to achieving these ambitions. Indeed, mobile access to the paper, which sells a single, cross- platform digital package, was a big reason for the jump in digital subscriptions last year, he said.

Mr. Ridding said The FT was considering joining Google's new One Pass subscription system, which will take a commission of 10 percent and share customer data with publishers.

An iPad without The FT in its digital newsstand might be a losing proposition for both parties. Yet if Apple sticks to its position, Mr. Ridding said, "it would be a shame, not just for us, but for the broader ecosystem that has developed in recent years around these devices.

"It requires some thought before harm is done."

Keywords: Google Inc (Org); Apple Inc (Org)

Copyright International Herald Tribune Mar 07, 2011