FT Direct Syndication Model Offers Lessons
Original date of publication: Feb. 27, 2009
Important Details: The Financial Times has built on its direct licensing initiative with two new programs; both are indicative of the next stages of of news usage on the web.
In April 2008, the FT made a significant break from traditional practice by reclaiming control of its licensing activities. At that point, it said that building and growing direct customer relationships, rather than indirectly licensing via aggregators, was a top goal. In addition, the FT believed it could maintain product value and pricing power better with this strategy. The FT now has more than 550 direct customers in its program. These direct customers can choose to have unlimited access for a defined group of users to FT journalism via FT.com and/or any of 21 aggregators. Academic and public library customers can continue to access FT journalism under a 24-hour embargo via the indirect licensing model.
Fundamental to that approach is the FT’s consumer model. Like the Wall Street Journal, the FT charges for online access, after allowing readers to sample up to 10 articles per month.
This year, the FT built on its direct license service in two ways:
- It began offering a customized RSS feed to its direct license customers. Corporate information managers can now pick FT content — by topics, byline, key word, company name, etc. — and let the FT headlines flow directly into the relevant places in its intranet. Each information manager can then update search criteria over time, making adjustments on the fly, with no limit to the number of RSS links that can be created. The news and information flow can also then be tailored to specific departmental or individual needs, with click backs to FT.com where direct customers have unlimited access rights.
- It began offering IP-authenticated access to its direct license customers. FT.com had previously used an individual sign-on/password authentication, which is still available and best used for remote access. The new IP-authenticated access provides organizations with unlimited access rights for a defined group of users and a single picture of the amount of usage.
“Both of these [initiatives] are the tangible results of our direct relationship,” says Caspar de Bono, managing director of B2B for the FT. On the RSS initiative, the belief is that the more customizable RSS will lead to more usage. As de Bono says, the FT wants to “help the customer make best use of their time – to filter out the noise.” Greater relevance equals more usage. More usage equals more value. More value equals increased ability to retain customers and to maintain price. Similarly, the IP-authenticted access, de Bono believes, will work in FT’s favor to prove, and re-prove, value.
Implications: Whether publishers license directly or not, Outsell believes that some lessons out of the FT’s emerging experience are key for all publishers who syndicate — and the syndicators that work with them.
These are the keys:
- It’s one thing to say the customer’s in control; it’s another to give them tools of control. To prove and re-prove value, publishers and aggregators need to provide better customization tools to customers.
- RSS is not a one-size-fits-all solution. Too many news publishers have begrudgingly offered RSS feeds, but many of them have defined them so broadly as to be of little usefulness. The granularity of RSS feeds is a key. Some readers — in the enterprise, in the school or in the local community — may just want a RSS feed of their most highly-regarded writer, or on a subject that’s a niche of a niche. Giving them what they want encourages engagement and loyalty.
- Knowing your customer is a long-term proposition. Many sellers — of information and much else — put much effort into the front-end of the relationship: the initial sale. The metrics are clear though that the cheapest way to gain business is first to retain, and then grow, the current customer base. In these times, such retention and growth must be fed by analytics. If the customer is not making complete use of the product (and how many are?), then sellers of information must first know that and then act on it. That’s one of the goals of the FT’s IP-authenticated access. For sellers of information generally, it’s key: keep learning about customer behavior and keep applying that knowledge.