Considering it was founded with the stodgy promise to be "a friend to the Honest Financier and the Respectable Broker", no one could say that 121-year-old institution the Financial Times has adopted a hostile stance towards new media.
The paper's former editor, the gadget-loving Andrew Gowers, embraced the internet with unabashed enthusiasm and, on stepping down, dismissed newspapers as "ink printed on dead trees". His new employer, Lehman Brothers, promptly came crashing down as if struck by a lumberjack's axe, but his faith in FT.com was more visionary. The Pink Un's website was founded back in 1995 and has been strengthened under current editor Lionel Barber to the point where it has 117,000 paying subscribers, and 1.3m non-paying registrants, a figure that is growing by 15,000 a week.
And now, according to Rob Grimshaw, managing director of FT.com, the site can help revolutionise the culture of reading newspapers online by switching to a pay-per-view system that mirrors the simplicity of iTunes, the vehicle that has done most to persuade consumers to pay for music on the internet in spite of the ready availability of the same tunes as illegal downloads elsewhere online.
Such a system will enable the FT to vastly increase its paying online readership. "If we are able to innovate with our pricing so that they access per day or per article – pay-per-view as you might term it – there has to be a broader audience," says Grimshaw. "iTunes is a great one to talk about because fundamentally they have created a fabulous buying experience. I'm a great believer that people don't object to buying things online. Equally, they do object to hassle. If you create an experience that's so quick and easy it involves pressing one button you will find a lot of people are happy to do it."
The FT is currently talking to payment processing companies with a view to implementing a new model imminently. "I'd like to think that as we get into 2010, users coming to the site will find something that says you can access FT.com any way you want to, either for a day as a one-off or as a subscription. We are in conversations with lots of different companies."
Up on the sixth floor of the Financial Times building, overlooking the Thames from Southwark Bridge, John Ridding, the FT's chief executive, is excited by the development. "I don't know how much we'd charge yet, we haven't determined the pricing," he says. "But our view is that there's significant potential for pricing per piece and per time period. The whole point about the internet is flexible consumption and reader choice."
The aim is to transform the culture of the majority of FT.com's 11.4m unique monthly users, "driving them" towards those other readers who already pay for content. "We certainly don't have any shortage of unique users, we have a lot of activity at the top end of the funnel," he says.
Ridding is just back from a holiday in south-west Portugal where he has been surfing the Atlantic breakers, and he thinks newspapers need to be ready to ride this wave of opportunity. Many of the 1.3m registrants who have access to up to ten free FT articles a month might be happy to pay a small fee for each additional piece, rather than face the blunt demand for at least £155.48 in annual subscription that currently kicks in when an eleventh article is requested. "There is tremendous potential there," he says. "It needs to be frictionless, people don't have a lot of time and don't want to go through a laborious transaction process for one article so the more frictionless that can become, and I think it will, I think there's potential there for monetising a whole new layer of traffic and readers."
This system, he believes, will actually help readers to see the value of taking an annual subscription to the site. "With the micro-payments or pay-per-piece approach you can be signalling the value of an annual subscription. I think (leading columnist) Martin Wolf is worth at least £5 a pop," he says. "All you need is a payment system that remembers your credit card details and makes it pretty painless, so that it's a one or two click process."
Newspapers are at the crossroads in terms of their online strategy. Last week Rupert Murdoch, the chairman of News Corp, said that all his newspaper websites would be charging for content by next June. British news organisations are awaiting the launch later this year of a stand-alone website for The Sunday Times and access to at least parts of that site would seem certain to cost money.
The future funding model of online news is complicated in Britain by the presence of bbc.co.uk, with its vast daily output of professionally written free news. Then there is the Google News aggregator, offering users the opportunity to freely browse a selection of sources on the same subject. In April, Robert Thomson, editor of Murdoch title The Wall Street Journal, dubbed such aggregators as "parasites ... in the intestines of the internet."
Ridding does not regard Google with the same hostility. "I don't think Google wants to be blamed for bringing down the fourth estate," he says. But as more publishers charge for content, Ridding thinks Google must move away from its policy of offering users only free sources. "I think that would be very good for the industry and very good for the reader. If you want to make all the information available, which I suppose is Google's central mission, then from a reader perspective they want quality journalism to be available too, and quality journalism does cost money."
Instead of focusing on reaching many millions of unique monthly users, media companies must "focus more on profitability and business issues", says Ridding. The FT is looking at doing this from micro-payments right through to data-rich specialist FT-branded publications, such as the recently-launched China Confidential, a 24-page, PDF-format fortnightly briefing that sells for £2,500 per year. For an extra payment, subscribers can have direct access to the FT's China expert and former Beijing bureau chief James King.
Although Ridding accepts the highly specialist FT is well-placed to tap such revenue streams, he believes there are money-making opportunities for generalist publishers if they are able to think more commercially. "A lot of the brands in traditional media are very strong, they stand for something," he says. "There are areas of content that can be differentiated according to the quality, the expertise, the brand, and you can build a paid-for model around them. The whole thing doesn't have to be paid for, it could be a Freemium model where some stuff is free but certain elements are paid for."
For publishers this is not a time for despair but for making money. "The answers will be different for each publication but it's urgent that there's more focus on the possible solutions rather than just the problems," says Ridding.Reuse content