FT won't give up subscriber relationship to Apple
LONDON (Reuters) - The Financial Times wants to keep selling subscriptions for its digital news directly to readers rather than surrender control of new customers who sign up via Apple's iPad, the managing director of FT.com said.
The Pearson-owned FT offers an option of access to its digital products as part of a package with subscriptions to the newspaper, but Apple has begun to insist that publishers go through its proprietary App Store to sign up customers.
Apple's hit tablet computer, the iPad, has become a major driver of new subscriptions to FT.com, thanks to its large and crisp display, possibilities for interactive features and affluent customer base.
But the FT values direct relations with its customers which allow it to tailor advertising and products to its audience, and is resisting Apple's efforts to channel them through the App Store.
"We don't want to lose our direct relationship with our subscribers. It's at the core of our business model," Rob Grimshaw told Reuters in an interview on Monday.
He said he was hopeful of a positive outcome to negotiations with Apple, but added: "If it turns out that one or another channel doesn't mix with the way we want to do business, there's a large number of other channels available to us."
He added: "We have a great relationship with Apple."
Like the Wall Street Journal, owned by Rupert Murdoch's News Corp, the Financial Times has successfully persuaded many of its readers to pay to read its online version.
It has increased its total number of paying subscribers to 590,000 thanks to FT.com, from a peak of 440,000 reading the print publication.
Providers of less-specialized news, led by News Corp's Times of London and the New York Times, are now also erecting so-called paywalls to make their online readers pay, in experiments closely watched by the rest of the industry.
The London Times has lost more than 90 percent of its audience but says its remaining readers are far more valuable because they are more engaged, while the New York Times, which still allows some access for free, has just begun to charge.
News Corp recently launched a custom-made newspaper for the iPad, The Daily, in the United States.
Grimshaw said FT.com had far more to lose by giving up its customer relationships to Apple than many other publishers, who had not yet developed a successful online business model.
"We have something to lose," he said. "The publishing market as a whole is in a different situation."
Having established an online business -- digital revenues accounted for 40 percent of the FT Group's sales last year -- Grimshaw is now focusing on mobile devices.
Recognizing that social networks like Facebook attract a huge amount of time that mobile users spend on the Internet, the FT is talking to Facebook about integrating Facebook logins with FT.com, so that users can more easily recommend its articles.
So-called social news -- consumers discovering news through recommendations on social networks -- is a fast-growing source of traffic to news websites.
Grimshaw said the rate of conversion of readers into registered FT.com users was four times as high from Facebook recommendations than from the public at large.
(Editing by Jon Loades-Carter)