FT.com vs Blackstone

When I had lunch with the FT's Rob Grimshaw, we spent all of our time talking about two sources of revenue: advertising, on the one hand, and subscriptions, on the other. Little did I imagine there was a third coming just around the corner: lawsuits!

In what will go down as one of the more bizarre (and unintentionally hilarious) lawsuits we've seen in quite some time, the newspaper filed a lawsuit against Steve Schwarzman's Blackstone Group on Wednesday for sharing an FT username and password instead of setting up separate accounts for its employees.

The suit claims that the "FT is entitled to actual and/or statutory damages; those defendants' profits arising from infringements", and "increased statutory damages" owing to the willful nature of the infringments.

This could be one instance where Blackstone is thankful for not having made much money of late: it might even be able to say that its infringements led to losses rather than profits.

But the lawsuit does shed some light on how successful FT.com has been at getting its user base to register: it says that the site has 7.1 million unique visitors each month, and just 1 million registered users. Which means that only 14% of FT.com's visitors have registered.

This is actually a natural downside of the subscription model. When faced with a subscription firewall, people who know subscribers are going to ask those subscribers if they can use their username and password to get past the firewall. It's an inevitability, no matter how many lawsuits the FT files. And as a result, those users will never register themselves. If you want to maximize the number of unique users who register, it's a good idea not to have a subscription model at all.