Reuters Summit-UPDATE 2-FT sees BlackBerry with smaller role in future

Thu Jun 14, 2012 11:33pm BST

Quotes

   

* FT: developing apps for BlackBerry is behind Windows 8

* Expects to derive 50 pct of revenue from digital in 3-4 yrs

* 285,000 digital subs are nearly half of its total readership

(Adds comment from Gannett CEO)

By Jennifer Saba and Yinka Adegoke

NEW YORK, June 14 (Reuters) - Financial Times, which gets nearly a third of its revenue from digital subscriptions, expects BlackBerry smartphones to become less important for corporate executives as BlackBerry loses market share to devices like Apple Inc's (AAPL.O) iPhone and Google Inc's (GOOG.O) Android-based system.

FT.com Managing Director Rob Grimshaw said BlackBerry, made by Research In Motion RIMM.O, is now fourth in terms of priority for developing the FT's applications, even behind Microsoft Corp's (MSFT.O) Windows 8.

"It's something we keep pushing back," Grimshaw said at the Reuters Global Media and Technology Summit in New York.

"We'll be doing something, but it's becoming less and less important in our world. They still have a presence in the corporate marketplace but they have lost their dominance."

The Financial Times, owned by Pearson PLC (PSON.L), has been a leader among newspaper publishers in devising strategies to make money from digital media. It has been charging for access to its website for more than a decade and has applications for the iPhone and Android-based devices.

Last summer FT.com declined to place its app in the Apple iTunes Store and instead developed a Web-based app, in order to sidestep Apple's control of user data and revenue-share terms.

Many content providers are wary of not being in the Apple store since so many consumers own iPads and iPhones.

Grimshaw said FT's absence from the Apple store has not hurt its ability to attract digital readers.

"We've been publishing since 1883. We don't need Apple to tell people we're here," said Grimshaw.

The FT has 285,000 digital subscribers, nearly half of its total readership. Grimshaw expects the FT will derive 50 percent of its revenue from digital in the next three to four years.

The FT is closely watched by other newspapers that are considering charging for online content. The industry is facing unprecedented challenges as advertisers choose to spend elsewhere and readers ditch paid print product in favor of free online news.

Newspapers' advertising revenue has dropped more than 50 percent in five years, wiping out more than $20 billion in revenue, Grimshaw noted, citing figures from the Newspaper Association of America.

"What that will result in is a lot of newspapers going under," he said.

Newspapers' mass distribution had always given it a competitive edge. But the Internet turns that on its head, Grimshaw explained.

"In some ways it didn’t matter what you put in the product. People would still buy it. You move online, distribution is not an advantage," he said.

"The result you see is a massive oversupply of news."

While the FT is in a somewhat unique position with its global reach and business related news, other newspapers can find ways to charge for content tailored to the communities they serve.

Gannett Co Inc (GCI.N), the largest newspaper chain in the United States that publishes 82 dailies including the Arizona Republic and the Des Moines Register, is starting to gain some traction from its online pay model strategy it began testing in some markets in 2010.

Gracia Martore, Gannett CEO, said on Tuesday during the summit that they are seeing customers who are new subscribers at the newspaper sites that rolled out a digital pay strategy.

"We are pleased with consumer reaction," Martore said. "We are exceeding our expectations."

Gannett plans to have a digital pay model in place where readers can pay one price to access digital and print content at all of its newspapers, except for USA Today, by the end of the year.

The company expects to generate $100 million of additional operating income in 2013 because of the new strategy.

"There's always an opportunity for the print paper and print advertising but we also understand that consumption is happening in a digital format," she said.

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(For more summit stories, see [ID:nL1E8HCH45])

(Reporting by Jennifer Saba and Yinka Adegoke; Editing by Phil Berlowitz, Richard Chang and Peter Lauria)

((jennifer.saba@thomsonreuters.com)(1 646 223-6173)(Reuters Messaging: jennifer.saba.reuters.com@reuters.com)) Keywords: MEDIA TECH SUMMIT/BLACKBERRY

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