The internet is back (but then, it never went away…)

It is now five years since the bubble burst. Five years since we rediscovered that cash-flow can be rather useful for paying the bills and that the laws of gravity still apply to most of us. Five years of chuckling over how silly we were to get carried away with the idea of a new business paradigm and five years to forget the share options that we thought would enable us to retire early. So that’s that. Back to reality, just the same as before.

Well, no. Just in case you hadn’t noticed, new technology and new media have continued their quiet takeover of our lives. The frothier manifestations of the internet boom have long since evaporated but that has not stopped Amazon, Google or Ebay building global empires out of services that we never knew we wanted until we woke up one morning and found we could not live without them. Not only do we have a worldwide web of information available at our desks but, armed with 3G mobiles or Blackberries, more and more of us have access to it when on the move too.

News Corporation

If you had read the FT on 16th February (and, gentle reader, I am sure that you did) then you would have learned that 50 top executives from News Corporation were meeting in New York "to map out an internet strategy for the global media company" in what was described as "the group’s most intensive look at web plans since James Murdoch, the chairman’s second son, oversaw its new media strategy in the late 1990s. Those efforts, including a plan for an entertainment website, proved abortive".

So the internet is back then. Or let’s say publishers have woken up to the fact that it never went away. As the IHT reported on 15th March: "at some newspapers the number of online readers now surpasses the number who buy the print edition… This migration of readers is beginning to transform the newspaper industry… And newspaper executives are watching anxiously as the number of online readers rises while the number of print readers declines". There is no doubt that printed newspapers are having to work ever harder to justify their existence in a world where information is available – by the bucketload – from a huge number of online sources.

I would be the first to say that the newspaper is not dead. Printed paper is still a brilliant way of presenting many types of information. But, whether you are talking about news, data, commentary or advertising, there is no part of our product offering which can be said to be immune from online competition. So what specifically are the challenges for us in print circulation and how should we address them?

Value for time

The first challenge is about us: the readers or consumers of news. They – we – are under pressure. And the pressure is primarily about time. Whether or not we really have less spare time than our parents did is perhaps debatable, but there are certainly more alternative attractions competing for our time than ever before. When it comes to news and information, we are bombarded with multiple sources (many of them on-line) and we cannot possibly spare time for them all. Readers are therefore choosing the sources that work best for them, which may well mean the sources which give them the greatest benefit for the least investment of time. As previous contributors to InCirculation have said, the key thing now may be to deliver value for time rather than value for money.

The second challenge, therefore, concerns our products and their content. If we want readers to continue investing time in the printed product, we need a clear understanding of which forms of content work best in that format. The internet has its good points and its bad. When it comes to archive and search, the on-line product has huge advantages. Conversely, long pieces of commentary or analysis do not work well on-screen. What is perhaps harder to fathom is why the pages of data contained in the FT still attract plenty of usage (as research says they do) when we fully expected that type of information to move rapidly on-line. Actually, if you just want to check a couple of share prices each day, looking them up in the paper is still a fast way of doing so. We need to exploit each medium for what it is best at.

Channel proliferation

The third challenge is the proliferation of channels or platforms that we can use for delivering information. I have talked so far mainly about the printed newspaper and the internet. But that is by no means the extent of the options. If you want your information very condensed, SMS alerting may appeal. If you want a complete magazine but you are far from home, an e-periodical may be attractive. The rapid take-off of 3G phones is bringing mobile internet to the fore. Downloadable video is set to boom with the growth of broadband connectivity. And then there are services like Factiva which repackage content from many sources and present it to your desktop. And tomorrow… no doubt there will be yet more channels all competing for the consumer’s time. And that means we are going to have to keep investing in repurposing our content for different platforms.

Which may not be a problem, so long as consumers are prepared to pay for it. This is the ultimate challenge which brings all the others together. Persuading consumers to pay for content is the key to our future business models, unless we really want to be wholly dependent upon advertisers to fund our journalism. So we need to understand what readers value and how we can extract some of that value from them in exchange for enabling them to access our content in multiple ways. We have blazed a trail by charging for subscriptions to ft.com. And I see that Metro (which is not perhaps often thought of as a breaker of news) offers an SMS service costing the reader up to 75p per day (ie more than the cost of most newspapers) to receive three texts. A licence to print money? Perhaps, but good luck to them if they have found a way of delivering content that readers value via a platform that they find convenient, such that they are prepared to pay real money for the service. Isn’t that what we all need to do?

Anytime, anywhere, anyhow

So how is the FT responding to these challenges of the internet age? I cannot give you all the details but I will try at least to explain the vision we have of the future. At its heart is the simple idea that when a reader signs up to receive FT content, they should be able to get it however, whenever and wherever best suits them.

If we go back for a moment to the channels available to the consumer, we are in no doubt that we have to be able to deliver our content through pretty much any of them. The jargon for this is to be "platform-agnostic", allowing the consumer to access FT content in paper, on-line and via a variety of mobile sources. It may be expensive to back all possible horses, but we really don’t have a choice. It is the consumer who decides which platform works best for him or her.

Readers may want emailed headlines when they first get up, sector analysis in printed form to read on the way to work, SMS alerting if their share portfolio moves in value and an update on the day’s corporate news via their desktop before they go home. They choose the channel which best suits them for each interaction. We should not care which they use; and our business model must be capable of delivering this multi-channel strategy, both to individual consumers ("B2C") and to businesses ("B2B"). Casual readers may dip in and out and will pay per copy or per view; but the real goal is to secure a committed core of consumers who are prepared to sign up to a much deeper relationship with us. And, of course, that core audience happens to be exactly the one our advertisers want to reach too.

Question of delivery

The vision is simple enough, but delivering it is not. In the UK market, where our readers are traditionally served via wholesalers and retailers, it can be challenging to establish relationships directly with end consumers, which is a prime reason why we are now putting effort into developing subscription routes to market. I have written about subscriptions before and I will not repeat myself here. Suffice it to say that the issue for us is not whether we deliver copies direct or through existing trade channels (we will assuredly do both); the issue is being able, as a publisher, to have the kind of direct relationship with readers that enables us to deliver the vision of a multi-product, multi-channel news service. And other add-on services too, if they help consolidate that relationship.

This may sound theoretical but there is nothing abstract about the challenge that we face. If we cannot deliver content that consumers want, via the channels that suit their lifestyle, they will go elsewhere for it: probably elsewhere on-line. And if we cannot deliver something that the consumer values, we will not be able to charge for it the kind of price that will enable us to survive commercially. That is the reality of business and the stark truth facing any media business in the internet age. Our very survival depends on our ability to respond appropriately.