In 2007, the Financial Times was one of the first newspapers to begin a serious and sustained effort to build a paid digital content model with the launch of its metered access system. Seven years later, the Pearson-owned newspaper can point to a set of financial results for 2013 - the year the newspaper reached its 125th birthday - that go a long way towards vindicating its approach.
Despite flat revenues for the year, the FT Group delivered underlying profit growth of 17 percent year on year to £55 million.
As CEO and 25-year FT veteran John Ridding tells TheMediaBriefing, that increase in profitability is being driven by a shift away from a reliance on print advertising towards digital subscriptions:
"The big challenge for any business in transition, and certainly a traditional publisher, is you're investing in the new and facing structural decline in the old. We've seen year after year of often pretty chunky decline in ads, which for most of that 125 years has been our single biggest source of revenue.
"We've been trying to build the new while managing the decline of the legacy. That's been tough from a profit perspective, but now we've achieved critical mass in digital and the subscriptions."
Increasing profits may be the main measure of success, but any CEO wants to see revenue growth as well. Ridding says that the FT is now at the point where its reduced reliance on print advertising means digital subscriptions, coupled with other new areas of the business such as events and digital ads, will begin driving top line growth.
A look at how radically the sources of income at the FT Group have changed supports his optimism:
-- Digital takeover: Digital advertising and subscriptions, coupled with services, now account for 55 percent of all revenues, up from just 31 percent in 2008. Digital subscriptions and advertising alone account for 35 percent of revenue.
-- More content, less marketing: 63 percent of revenues now come from content, with just 37 percent from advertising. In 2008, advertising accounted for more than half of all revenues, and even that figure is less than the roughly three quarters of revenue it would have made up for much of the previous century.
-- Total readers: The FT now has the highest paying readership in its history, with total circulation up 8 per cent year-on-year to 652,000 and digital subscriptions up 31 per cent to 415,000.
Example or exception?
The FT has a compelling digital success story to tell, but is it of any relevance to the wider industry, most of which isn't focused on serving a high-value business audience hungry for financial news?
Ridding concedes that the FT's business focus gives it an advantage over other more generalist titles, but says that doesn't mean its model isn't going to work for the mainstream:
"The majority of publishers in the US now have some sort of paid model. There's different formulas and flavours of doing it, but the fundamental principle that you can charge, that it's valid to charge, for content online is now accepted.
"It comes down to that very simple proposition that if you are producing something valuable that people are willing to pay for then you can charge for it. It could just be a brand attachment, a sort of loyalty, but that's pretty valuable stuff."
Ridding says the FT's metered access model, which widened the charging system introduced in 2001 to allows access to a number of articles for free before asking people to subscribe, won't emerge as the only way newspapers can make money in a digital environment. However, he is skeptical about attempts to rely on entirely open, mostly ad-funded models such as the Guardian's, or the stricter all-or-nothing approach to charging adopted by News UK at The Sun and The Times.
"We were very conscious at the get go of not being isolated. Our approach was to have this funnel and try to be flexible. Obviously our mission in life is to bring as many people as we can as deep into the funnel as possible, but to do that you have to have a funnel. If you just whack up a wall you are going to lose those people.
"On the other side there are publishers who feel they can play the volume game. I disagree with that for two reasons. One is that I don't think you can play the volume game against Google, Facebook and LinkedIn. They do a lot of volume. And more fundamentally, it is healthy to derive your main revenue from the content you produce. Advertising is a wonderful and valuable addition to that, but the direct relationship has to be between the publisher and the reader of the content."
As well as focusing on digital subscrtiptions, the FT has fully embraced the shift away from desktop news consumption to mobile. Ridding says mobile devices now account for almost 50 percent of total traffic to the FT and close to two thirds of subscriber traffic.
However, Ridding echoes the comments of his chief technical officer John O'Donovan who told The Drum at Mobile World Congress last month that newspapers need to have a "universal content" strategy, rather than focusing on the increasingly "meaningless" obsession with being mobile first.
It is, says Ridding, about ensuring you have the technological and cultural set-up to deliver content on any device that your audience wants to use. He says the FT decision to build an HTML5 app rather than rely on native versions for the ecosystems of Apple and Google has put it in a stronger position to adapt to the next wave of devices:
"We had that moment with Apple where we had to develop that web app and because of the web app, quite early on we had a mobile platform where we had all the data we had on a PC. It was a tough decision at the time, and it was the right decision, and one of the benefits it had was it equipped us in the world of mobile with data others didn't have.
"We should be open minded and ready for whatever the new devices are. It's very hard to predict what they will be, but there's no doubt they will arrive. We are technologically ready, and I think we are mindset ready."
The Financial Times ended its 125th year in the midst of the most radical change in the way it makes money since its foundation.
It's still facing the same challenges as other newspaper publishers – in particular the continued decline of print advertising, changing consumer habits and a world where a new competitor can spring out of nowhere.
But those 2013 milestones suggest the FT has created a paid-for digital business that can stop revenues sliding and deliver increasing profits. That's a place most other newspapers would like to be, and the FT has as good a chance as any of making it to its next big anniversary in 25 years time.