Looks like paid content really does work. FT Group profits rose 13 percent to £195 million in 2008 – “as growth of digital and subscription businesses and strong demand for premium content exceed the decline in advertising revenues“, said owner Pearson (NYSE: PSO) in its full-year earnings, adding it “benefited from the shift towards subscription and service-based revenues”.
We knew the part-paid access model FT.com introduced in October 2007 had boosted site registrations, but paying subscribers were still said to be flat last year. Now, however, online subs grew nine percent to 109,609 in 2008, on a fivefold hike in non-paying registrations to 966,000.
The economic gods look favourably on FT – after the acquisitions of Mergermarket, Exec-Appointments.com and Money-Media last year, digital now makes up over two thirds of FT Group revenue and advertising, where revenue sank by three percent, only a quarter. Now the FT expects “strong renewal rates in our subscription business” despite “a tough year for advertising”. Even FT print circulation revenue grew 16 percent over the year; The Economist circulation, too, grew 6.4 percent.
This stellar performance won’t go down well with FT staff balloting on industrial action – a response to CEO John Ridding’s (pictured) January plan to cut 80 jobs to make up for “audiences and advertisers moving to digital channels combined with global recession”. Profit from FT Group’s Interactive Data grew 15 percent to £121 million, while profit from the main FT Publishing unit grew nine percent to £74 million.
Overall, Penguin scored a quarter higher profit of £585 million on 16 percent better sales of £4.81 billion.