Magazine article Information Today

Getting Users to Pay the Freight

Magazine article Information Today

Getting Users to Pay the Freight

Article excerpt

Last May, FT.com, the London Financial Times' Web site, followed in the footsteps of WSJ.com, the Economist, and Salon .com and began charging users to access content. Has the move come 6 years too late? Or was FT.com right to bide its time?

When FT.com was launched in 1996, it was widely held that users would not pay for information on the Internet. Consequently, like most newspaper and magazine publishers, the FT did not seek to charge for its Web content.

That same year, the FT's U.S. rival, The Wall Street Journal, launched WSJ.com. In doing so, however, it made the radical decision to charge visitors $49 a year to access the site ($29 for print subscribers). This decision challenged one of the most fundamental precepts of the digerati. Within a year, WSJ.com had become the largest subscriber-paid publication on the Web. Today it boasts 665,000 paying users, with subscribers now charged $79/$39.

Not surprisingly, many concluded that The Wall Street Journal had judged the market more shrewdly than the Financial TEmes, particularly given the growing number of other publishers who have rushed to emulate WSJ.com following the bursting of the Internet bubble-not least, FT.com. But is this a fair assessment? Has FT.com perhaps benefited from holding back?

"We knew that at some point we wanted the consumer to start paying the freight," says John Marcom, FT's president in the U.S. "But there was this whole mantra [in the early days] that things were moving so quickly that it was important to get audience fast."

FT.com certainly succeeded in that. By May 2002, it was attracting 2.7 million users a month-more than 41/2 times as many as WSJ.com had signed up. This led FT.com to claim that it was the most popular audited business Web site. Given that level of audience and the change in the marketplace, Marcom says, "We felt we had reached a point where it made sense to explore how we could get those people to pay more for content."

Mixed-Mode Approach

Rather than introduce an entrance fee for the entire site, however, the FT has decided to charge only for premium editorial content and archival data. In fact, says Marcom, around 80 percent of FT.com content remains free.

This differs somewhat from the approach of The Wall Street Journal, which has effectively built a financial firewall around its entire site. "Almost all of the subscription-based Wall Street Journal online is a paid site," explains Scott Shulman, president of Dow Jones Electronic Publishing. "The only thing nonsubscribers can access is the first home page."

In addition, FT.com has tiered the service. Level-one subscribers, who pay $95 a year, get access to premium editorial content; in-depth industry and country surveys; e-mail newsletters; Adobe PDF downloadable files of the FTs complete front page the night before publication; e-mail, calendar, and file storage services; and a 5-year archive of the FT.

Those who are prepared to pay $225 for level two get all the features of level one, plus access to the World Company Financials database, which offers in-depth information on more than 18,000 listed companies in 55 countries, and World Press Monitor, a searchable database of more than 500 international media sources.

By adopting this mixed-mode approach, FT.com believes it can get the best of both worlds. "The billboard value of the free part of the site draws lots of people in and ... gives us the opportunity to continue to sell advertising revenues," says Marcom. "At the same time, we have opened up another revenue stream for ourselves through subscriptions. So we can get people in and then start showing them the things we can do if they want to have a deeper relationship with us."

Deeper Relationship?

But do users want a deeper relationship? When we spoke in November 2002, Marcom was confident. "Our last public disclosure, in August, showed that around 20,000 people had signed up in the first 3 months. …

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