Yajiao’s Blog

Posts Tagged ‘Financial Times

Influenced by the digital revolution and the wide application of the Internet, many traditional media companies such as newspapers and magazines adopt online business to expand their market and attract audiences. However, it is difficult for traditional media players to actually get profits from their online products. Despite much lower marginal costs for electronic reproduction and distribution, the initial investment in establishing the service is heavy. For instance, 400 extra employees were recruited to produce the online version of New York Times. The main revenue is from advertising, as media organisations provide free online content.

Online media providers seek out new ways to charge a fee from the Internet. One strategy is to target niche market with users who have special interests in certain kinds of services. The Wall Street Journal, mainly targets readers who are interested in financial information, is the first newspaper trying to make online news profitable in America. In 2003, it managed to attract 2.6million users to pay a $29 subscription. Similarly, the Financial Times in the UK, which is a specialist financial publication, set up an online subscription model as well. It gives readers a certain number of articles free online before asking them to subscribe. Here is the subscription form from its website.

In 2009, although there was a fall of FT’s print circulation, its digital subscribers increased 30%, as during the financial crisis, people required more economic news. John Ridding, the FT Group chief executive, said “I don’t think anyone can afford to dismiss the idea of developing paid-for content because journalism is valuable.”

In addition, an growing number of top newspapers in the UK join rush to gain profits from online readers. The Times and the Sunday Times, both are owned by Rupert Murdoch’s News Corp., which also owns the Wall Street Journal, will begin charging online content from June 2010. The subscription fee is £1 per day, or £2 for a week. Print subscribers will get free access to both sites, thetimes.co.uk and thesundaytimes.co.uk. Times Editor, James Harding said that online journalism is not worthless. Despite free newspapers and free content on the Internet, people will pay for quality information. Murdoch also plans to introduce charging for online edition of the Sun and the News of the World.

To deal with the declining advertising revenues from the print copies, newspapers groups are looking for new business model. For me, as a reader, I am reluctant to pay for the online newspaper. However, as a potential online journalist in the future, charging online is a way to make my work valuable.