Rob Grimshaw, Managing Director, FT.Com
When it comes to digital journalism business models, Zuora client The Financial Times is first among equals. Last year it became the first newspaper to earn more money through subscriptions than advertising. It was also the first newspaper to earn more from digital operations than from print, as well as successfully replace it’s falling print revenue with digital income, a remarkable achievement.
Here’s a telling quote from a recent Columbia Journalism Review interview with FT.Com managing director Rob Grimshaw, discussing their decision not to sell on iTunes:
“DS: Help me understand the HTML 5 issue: what was the choice there, what was the challenge?
RG: The challenge was Apple’s terms and conditions, which had two problems. The first is the Apple tax, they wanted to take 30 percent of every transaction around our subscriptions, every acquisition and renewal. And it doesn’t make a whole lot of sense to pay 30 percent to somebody else’s billing platform when you’ve already built your own at great expense, so that was a headache. The second big thing, which in many ways is more important, is Apple wanted to intermediate in our relationship with our customers.
Now we knew, because we had a pretty mature model at that stage, that the relationship with the customer is absolutely crucial. If, for example, you wanted to manage your churn rate effectively, you need to be able to talk to your customers; you have to have that direct channel if you want to upsell, if you want to market other products, etc. etc. If you want to bring your customers back to the site on a more regular basis, you need to have that relationship…When you add it all together, we knew that around 60 percent of the value of a subscription to us would disappear if we went through the Apple channel.”
Please join us this Tuesday, July 1st, for a webinar exploring how The Financial Times and some of the world’s leading media organizations are growing the bottom line by mastering the subscription experience for their customers.
We’ll be discussing:
How the media industry is reinventing around the subscription experience
How leaders are building valuable relationships with subscribers — plus best practices for managing these relationships
How to simplify your software solution to improve the subscription experience for your business and your customers