Stop the presses #1: FT could ditch print by 2015, too

Last week, writing elsewhere, I did the maths on the Guardian’s surging digital revenues.

During an interview/conversation broadcast by Radio 4’s The Media Show, Alan Rusbridger suggested that online ad revenues at Guardian News & Media are growing by 100% YOY. He also suggested that online revenues as a whole would rise by 30% to £40m this year.

These post-recession growth rates won’t last forever. But if you apply more a more conservative growth path to online revenues over the medium-term, it becomes apparent that the Guardian might be able to support its entire editorial operation through digital means as early as 2015.

  • At 10 percent annualised growth, the target date is 10 years away, in 2020.
  • At 15 percent, it’s seven years away, in 2017.
  • At 20 percent, it’s five years away, in 2015.

This, of course, will open the way to switching off the company’s Berliner presses. The Guardian, in other words, could choose to go entirely digital.

Others are alive to the same possibility. This week, Paid Content quotes Pearson’s director of global content standards Madi Solomon:

Solomon says the FT is committing to ‘less print’and says the FT sees a five-year trajectory for having exited print in substantial part. ‘They’re not saying that, by five years, they’ll completely stop it, but they do see that the sunset is going to be in about five years for them.”

Paid Content describes how the FT is already staging a ‘tactical retreat from printing in certain geographies”.

This is interesting. I’d heard that the FT is aggressively squeezing inefficiencies out of its vastly complex print operation that spans three continents and multiple editions. But the existence of a long-term trajectory for switching from print to digital is something else altogether.

You can look at this in the broader context. For much of its recent history, the FT has struggled with wafer-thin profitability and big cyclical swings in ad revenues.

I strongly suspect that outsized digital profits — from online subscriptions and ad sales — are helping to change the underlying dynamics. Digital revenues remain smaller than print revenues, but the associated margins are bigger.

‘More of the costs of the editorial operation are coming over on to the online P&L, says Rob Grimshaw, the managing director of FT.com. ‘If we shut down the web site tomorrow, we would lose a lot of profit.

‘That’s what publishers need to deal with. Revenues aren’t on the same scale, but profitability is on a different scale.”

Much of the fear about the future of newspapers we’ve witnessed in recent years has been predicated on the notion that digital revenues will never grow large enough to support traditional news-gathering operations.

But what if national news organisations can push those digital revenues to the point where they support a fully-fledged newsroom? What if the revenues in question end up being more profitable than those generated by the declining medium of print?

The possibility of these things happening — alongside the huge potential of web-based openness and collaboration – is what prompts Alan Rusbridger to suggest that we’re ‘on the edge of a golden period journalistically”.

It’s a wonderful thought. Increasingly, there’s more than wishful thinking behind it. Whether the answer lies in paywalls, better selling of online display, or both, the news business is getting stuck into the serious business of shaping its future. Looming deadlines have a way of concentrating the mind.

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