Panel debate chaired by FT media editor Andrew Edgecliffe-Johnson. And he kicks off with: do you have a business model that will support your businesses?
Noel Penzer, VP Interenational and Managing Director UK, AOL Huffington Post Media Group:
The idea that we’re just an aggregator isn’t true: we have salaried journalists. The aggregation part, to quote Arianna, is to recognise that they’re not the only source of good journalism. And the blogs give people of strong views a platform to make their ideas known. The business is advertiser-funded, especially outside the US (the US arm of AOL still has an access business.)
John Ridding, Chief Executive Office, Financial Times
Multi-channel, device neutral, charging for subscriptions has largely worked as a model. Content revnues are growing at double digits. It could be that this year that content revenues overtake advertsiing revues – but they like having both. You have to have a successful business to retain expensive journalists – they’re actually increasing their number of journalists. And you’re not just getting a subsitute for ad revnue, you’re also getting a closer relationship with your readers. That’s important in improving the quality of the journalism they provide.
Is Lebedev just missing an opportunity for revenue? They needed to be considered as print products first, he suggests. He’s very admiring of what the editors have done – it’s taken the Evening Standard off its sickbed. They’re launching a new website called Independent Voices – a liberal, campaiging website, giving people coming to the site a voice. It’s UK for now. It’s ad-supported. He descibed it as “liberal fundementalism” – I though The Guardian had that sewn up? 😉
Penzer says that they’re seeing ad revnues growing across all products and sectors. They may not have print, but they are a former ISP, and they still have a huge volume of consumers which are heritage. They need to enrich their propoerties with advertsier opportunities – they’re creating products to meet the needs of brand advertisers.
Ridding suspects that anyone playing the colume game on advertsing is going to struggle. Advertisers want combine packets of print, digital and video. Being able to target advertising allows marketing directors to prove ROI. You can prove very clearly who’s reading what, and what the return is. They’re concious of data privavcy, but you can prove who people are at the cohort level. They can achieve similar rates for premium digital spots as they could for paper premium spots – but at much lower distribution costs.
Lebedev – the Standard’s advertising model is very dependent on print. If we wanted to raise the circulation we could distribute more copies, but the financial model works as it is for now. An app edition would allow it to be used on the tube – it’s a commuter title – and would reduce costs, but would change the business model. They can just pick it up at the moment. The Independent advertising model also works as a package model. The website is seeing substanial growth, which is allowing them to charge more for the advertising.
Penzer – for the time being they don’t have plans to go to paid-for apps on Newsstand and the like – but that could change as the environment changes. How much money can you make off mobile? From a display revenue point fo view, it’s not setting the world alight. They do have some app-only products within the wider business, and they do see mobile as fundemtal.
Ridding – mobile is an absolute game-changer for the FT. They can reach readers internationally for zero cost. The US is their biggest new emerging market. They’re seeing 70% plus growth on tablets, and 60% on smartphone. Will the content they do on mobile? The answer is “yes”.
Lebedev wants to build a group of young, talented journalists and tchnologists to build something completely different with Independent Voices. The way the revolutions in the Middle East were reported and organised is a complete game-changer. Anyone can be a journalist – that’s something you can harness, and allows you to reasses what you’re doing. You can get the latest footage and photos from place you don’t have a journalist. And you can do different things with your products. What the Evening Standard has done brilliantly done in the last year has run campaigns.
How will the FT sustain its share of the wallet as more titles charge? Ridding thinks the more the better, because it supports the principle of charging. The potential of using data and data analytics to increase the audience and the engagement of the audience is something they’re just beginning to understand. He never thought, 24 years ago when he got into journalism, that he’s be excited by data. We’ve gone from a world where you knew nothing about the customer in the newsagent to a situation where you know pretty much everything about them.
Penzer – data underpins all of what they do. It’s fundemental, and they have 10 years’ experience with it. But they do theink they will acquire readers from sites which have switched to a paid model. Social media isn’t just about Tweet and Like buttons, it’s about how you create around social media – watching trends, consumers being journalists for brief periods. How do you utilise that? How do you take that into an editorial context?
Ridding – they will continue to work with device manufacturer to build products on new devices. They want a long-term relationship with their customers on whatever devices they chose at any point. Are their incentives we can give to stimulate demand on other platforms?
Which is more important: smartphone or tablet? It’s about volumes for Penzer – and smartphone penetration is growing, and lower devices are diminishing. They’re about scale. HTML5 is one opportunity for experience on smartphones.
Ridding can’t afford development teams for every platform, so they need software products that can be tweaked for each platform – and you need to be across all of them – and you can’t second guess reader demands. You have to learn from the user data. Different content may be more popular on different devices.
How important is video? Lebedev is “very committed to print”. He understands that the future is digital and that there are huge opportunities in videos around live debates and engagement. Print, unfortunately, cannot provide what consumers have a demand for.
Penzer suggests that they want video on as many pages as possible. But they’re also think about how they take their video into every context. The numbers for UK video watching is huge. In the US they have launched the Huffington Post streaming network.