Closer encounters

The week when I meet Caspar de Bono, managing director B2B of the Financial Times, the business and financial markets are in turmoil and the global economy bruised from the fall-out of the credit crunch. News that financial power house Lehman Brothers has just collapsed is still sending shockwaves around the financial community. The future of financial services giants such as AIG, Merrill Lynch and HBOS is far from certain.

The panoramic view from the FT’s Thames-side offices in Southwark frames the dominant landmarks dotting the Square Mile. Downriver, the tightly packed steel and glass towers of the financial giants in Canary Wharf can be seen. It almost looks serene from up here.

Only a choppy, autumnal Thames indicates that these are turbulent times indeed. The FT’s position is a little more stable than the current state of the beleaguered investment firms it writes about, although it has not been all smooth sailing in recent years. In 2005, then editor Andrew Gowers departed, citing “strategic differences” about the direction the FT should go following a downturn in circulation. Reports in The Independent at the time suggested that commentators felt the FT was losing its authority in the City.

Model makeover
Like every other publisher, the FT has had to adjust its traditional business model in a world of free online information. All publishers and content providers have had to devise workable business strategies to remain profitable while maintaining authority and reputation in an already ultra-competitive market.

The response to this challenge was announced last October when the FT revealed plans for a content licence and charging its corporate customers directly rather than through news aggregators for FT content. Registered users of FT.com would get a limit of 30 page views a month for free; to get any more, they would have to subscribe for unlimited access.

In effect, the FT met the challenge head-on and made few apologies for doing so.

On de Bono’s watch, the changeover between business models and an agreement to operate a bridging licence allowed a more gradual transition for customers. While de Bono admits the licensing change was disruptive to some corporate clients, he believes it was a necessary step in the evolution of the business. With a bridging agreement for existing users to continue receiving their content through their third-party aggregators such as LexisNexis and Factiva until either the end of their contract or January 2009, arguably the transition period has been reasonably pain-free.

Six months into the new scheme, the dust has settled, but has the move worked for the FT and what have the benefits been for its customers?

De Bono says that it all depends on what perspective you take. “Looking historically, many people said, ‘We don’t understand why we have to pay for this, because we are already paying through news aggregation suppliers. You are now saying that you want a separate agreement and that you want to charge us for it?’
“Seen from that point of view, they say, ‘Where is the value?’

“Seen from a different perspective, the pricing we are offering for our licence is the same as the price we already get for our journalism in other channels.”

De Bono points out that the content licence is cheaper than the annual price of a newspaper subscription and on a unit basis lower than a premium subscription to FT.com.

“We don’t believe we are charging any more than our content has been available for in the market,” he says.

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