Awkward Questions for...'FT's' John Ridding

John Ridding has been with the Financial Times for more than 20 years, becoming its chief executive in June 2006. For the past six months, his job has consisted mainly of answering questions about Rupert Murdoch's purchase of The Wall Street Journal, or so it probably seems to him sometimes. Our interview, which took place Tuesday while Ridding was in Manhattan, was no exception, although I did try to mix a few other topics in for variety's sake.

The trends at the Financial Times seem to be countercyclical to what we're seeing in the newspaper industry as a whole. You've managed to increase advertising, circulation, profits and even cover price in the past year. To what do you attribute that?

It's a great thing in the sense that there's a lot of anxiety and doom and gloom around a lot of the traditional publishing industry, and, yes, we're pretty counter to that. We're pretty optimistic. We're seeing strong numbers both on the print side and online. On the print side, I think we are certainly the only quality newspaper in the U.K. and possibly the world that's increasing circulation despite the fact that we've put up prices in the U.K. and in many markets.

So I think that underscores three things: one, the loyalty of our audience; two, the incredible news that's going on around the world in business and finance; and three, if it's must-have information, people will pay for it. There's an idea out there that all news and information has to be free, but I think we've proved that people are prepared to pay a reasonable price for quality journalism. That's a fundamental belief that we have.

Now that that's out of the way, let's talk about the elephant in the room. What's your take on Murdoch and the Journal? How does it affect the competitive landscape for FT?

As a former reporter, I hate to ruin a great story, but we're not as hung up on that as people think. We're certainly not complacent, but we are confident, and we're confident because the strategy we've been following has been working, but in terms of circulation, audience growth and profits.

This idea that there's a sort of set-piece showdown between two titans of financial publishing is a little anachronistic. What we've seen over recent years is an explosion, a fragmentation of the market and a whole range of new competitors, which is challenging and exciting. So we're not looking in the rear-view mirror, or the side-view. We're looking straight ahead at what our strategy is, and it's working.

We don't know what Murdoch's strategy is with The Wall Street Journal. There's a lot of speculation about what it will be, but we do know what our strategy is, and we're confident in it because it's working.

The FT is fundamentally global. It's what we've been working on in the 20 years I've been there. Over recent years, we've pursued a different path from The Wall Street Journal. They've sort of circled their wagons around the U.S., and we've been resolutely global. We've focused very much on that high-end, C-suite, senior executive audience. Again, it's part of that idea that in a fragmenting and increasingly competitive media market, you've got to be pretty ruthless about your focus and who your audience is, and for us that's senior business decision makers. You have to be special and unique or you're toast these days.

To the extent you can take Murdoch at face value in what he says about going after The New York Times, it almost sounds like he's making it less of a frontal competitor for FT. Would you agree?

Yeah, well, one's heard that, one's read that, but we'll see. But the point is, we know exactly what our own sweet spot is and we're driving really hard in that niche. We're proud to be a niche publication. We know our niche, we've invested heavily in building it, and nothing's going to distract us from that.

After Murdoch started making noises about dropping the Journal websites's subscribers-only model, there was a lot of speculation that FT would do likewise. But instead, you announced a new model that's neither fish nor fowl: Visitors can read five articles for free before they have to register, and to read more than 30 articles in a month requires a subscription. For the millionth time, why'd you choose to do it that way?

Basically, we think that media consumption isn't fish or fowl. It's a lot more complex than that. People have different relationships with media and how they want to consume it.

The thinking was there are these huge waves of audience and traffic driven by what we think of as the wave machines of the internet -- aggregators, blogs, the Drudge Report, all of which drive huge amounts of traffic. The problem is, when you put subscription walls around content sites, these waves of traffic can just bounce back off them.

Our view was that we're sufficiently confident in the quality of our journalism that people would come in, like what they'd see, and at five they'd register and 30 they'd subscribe. We get more traffic, which is great. At the same time, there's that loyal, dedicated cohort of FT folks who want as much content as they can possibly get, and they're the subscribers. And the other key element is the registration level, which allows us to target, segment and know our audience effectively.

So that's one dimension to our thinking, and we've been very encouraged by
the numbers. The page view numbers are knocking on the door of about 40
million a month, 100 percent change. [To be precise, page views were up 90 percent year-over-year in November, according to Webtrends.] The registration numbers went from 200 to 400 a week up to between 15,000 and 17,000 a week.

Did you model what would've happened if you'd gone all-free?

It's pretty hard to model that stuff because you have about three or four variables all kicking in at the same time. We basically took all these decisions on the basis of what we knew about audience consumption habits. So this is our best estimate, but anyway it's a flexible model. We can tweak as appropriate

So on the numbers front we've seen what we want to see, which is the growth
of traffic and the growth of registrations, and we've been pleased with the
subscribers. That's got to play out a bit, the subscriber element, because the
idea is you're constantly funneling them through, and we're not sure yet how the
old subscribers will react, but so far so good.

And then the other dimension is the corporate consumer channel. For us in particular, being who we are -- this specialist business publication -- the corporate channel is very important, and I think it has very substantial potential which people don't always factor in.

And to utilize that channel effectively, it's very useful to have that subscriber pricing
threshold because otherwise we're not going to have a price level for the corporate market.

That all makes sense, but I'm not sure it fully answers the critiques from people like our own Felix Salmon, who argues that FT.com's hybrid model will create weird disincentives for would-be readers and create consumer confusion.

Look, these are interesting ideas and frankly we like the debate around them. No one has the silver bullet to all the issues about the new business model for traditional publications in the digital age. So it's great to have ideas kicking around. We think ours is a pretty smart idea, but we recognize there are debates that we're happy to engage in.

From a consumer perspective, I'd say that it's not that complicated. It's very simple for them. They face a couple simple choices like they do making consumer decisions all day long about everything. In a sense, it's at our end of the telescope, where we're trying to develop these models, that the complexities are, but from a consumer perspective it's really very simple. You can come straight in and look at an article. If you get to five, you're asked to register and it's a very light-touch registration. When you get to 30 and you're asked to subscribe. We haven't had any concerns or complaints about it.

Around the time that the Murdoch takeover was getting cemented last summer, Marjorie Scardino [the CEO of FT parent Pearson] was talking about the need to create new partnerships for FT. What's the latest with that?

Well, I think it's part of the media landscape now. People are talking to people, they're doing what makes sense. We have good relations with a lot of big media players and we cooperate where it makes sense. We have a lot of our journalists going on broadcast media. That's good for our profile. We have Reuters supplying our new online market section with first-rate data and analytics.

So our strategy is very much to focus on what we're really good at, which is high-quality, value-added news and analysis. And if there are partners who do other stuff that can help us, that frees us up to focus on what we really want to do. We talk to other people all the time. Where we see cooperation that makes sense, we'll do it. We're not dogmatic about it. We're pretty pragmatic.

FT made some news last week by buying Money-Media. Tell me about that.

Of itself it's a great business, but it also speaks more broadly to what we want to do and what we believe in. Of itself, it's market leader in a niche we love, fund management. It ticks all of our strategic boxes: It's digital, and we want to get bigger in digital; it's got a very strong and loyal subscriber base, and we want more subscribers because it gives a stability to the business; it's very strong in the U.S., with big global potential; and it's quality stuff.

FT Asia is sort of your baby. How's it doing? Is it over the hump, out of the woods, whatever cliche you prefer?

There's a couple things there. One is the print edition, which is seeing strong growth -- it's up 10 percent year-over-year in circulation. But we also think FT.com is crucial for Asia because the nature of the market is there's a large number of medium-sized economies spread over quite a large geography, so the physical cost of distributing newspapers is a challenge. That's where FT.com comes into its own because that is a great way of building our audience and extending our reach. So we're investing significantly in FT.com as a global proposition, but we think it's going to be particularly helpful for our mission in Asia. In China, interestingly, we just hit our 1 millionth registered user, and I think we have established market leadership in the international realm.

Anything else you'd like to discuss?

Quite often for traditional publishers, new technologies are seen as a bit threat or challenge, and there are challenges resulting from it, but I think the opportunities way outweigh the challenges. Video's a really good example. We're now producing about 100 videos a month. Our video downloads have doubled to about 30,000 per week. Editorially, it's fantastic because it gives you that immediacy.

From a commercial standpoint, meanwhile, it's fantastic because you can charge very premium rates, and it also gives us access to ad budgets that we never had access to. People talk about the threat to print advertising, and how it's a shrinking pie and we're all fighting like wildcats for our share of it, which is true, but people forget that new budgets are being opened to us because of new technology, so we can go after TV budgets and video budgets that we couldn't before. So it's important of itself, video, but it's symbolically also very important as an illustration of the kind of opportunities we wouldn't have had five years ago.