Moving into the consumer space—particularly at a time when legacy consumer media companies are fighting for their financial survival—is a natural step for cash-rich professional, electronic information firms, particularly in the business sector where information can translate into a business advantage. Meanwhile, some legacy print-based news organizations are trying to move in the opposite direction, into the private-news space. One of them is the Financial Times (disclosure: where I worked for fifteen years). Increasingly, the FT newspaper and Web site are the public, consumer face of a company whose highest margin enterprises are affiliated businesses that sell exclusive information to a niche, professional audience.
John Ridding, CEO of the FT and FT.com (and my former boss’s boss), faces constraints on the price he can charge for his newspaper, but far fewer limits on the price of professional information. Ridding argues that the FT and FT.com can be profitable on their own, “but these niches, drawing on the value of the brand and their infrastructure, can be extremely profitable. If you go from the newsstand to Medley [a high-end professional analysis service] there is quite a difference in price!
“What you have is the reach and the global audience of the FT brand that supports and drives these niche publications,” he said. “They can be organic, like China Confidential [an electronic newsletter edited by a former FT Beijing bureau chief], or they can be acquisitions like Medley or Money Media [an aggregation and reporting service aimed at money managers].” The FT’s shift was underscored in May when an executive from Pearson, the FT’s owner, told a media conference that within five years the FT is likely to have largely abandoned its flagship consumer product, the print edition of the newspaper—although a Pearson spokesperson said afterwards that was not true.
Straddling the consumer/professional divide can be a stretch. “A lot of the things a consumer news organization is good at, we’re not,” Wenig said. “We are building those muscles.” Building this model from the opposite starting point, the FT’s Ridding describes the change from his perspective as one of psychology as well as skills: “This is quite a mindset change for newspapers and for newsrooms. It is a challenge to the very deeply rooted instinct of journalists to want to reach as many people as possible. It may be easier if you are a more specialist publication to begin with. Journalists have to focus more on the quality and depth of their relationship with their readers, rather than pure reach.”
The private/public balancing act has echoes in other areas of journalism. One cousin is an older model, the columnist/speaker. Consider Charlie Cook, the political analyst.
Here’s how Cook described his business model: “It is like a stool with four legs. One leg that is twenty-six years old is the Cook Political Report. It has two editors and doesn’t cover its costs. It is the research and development part that differentiates me from a lot of windbags in Washington. The second leg is a contract with National Journal Group to write weekly columns for National Journal magazine and CongressDailyAM. The third leg is a small contract with NBC. The fourth leg is the speaking circuit, and that is very, very lucrative.”
Speaking at conferences—a high-cost service delivered to a small and exclusive group of clients—is Cook’s equivalent of the private-news businesses of Bloomberg, Thomson Reuters, and the FT. His other work, including TV appearances, is the equivalent of the consumer platforms that attract sources and burnish the brands of the big business news organizations. The analogy isn’t perfect—the Cook Political Report is a niche business, albeit a loss-making one—but the basic principle is the same. Cook uses his consumer exposure to market the time-honored money-making side of his operation: speeches. And meanwhile, “There is a subsidy taking place,” Cook said. “The speaking subsidizes the journalistic enterprise.”