The Financial Times: 'We believe they'll be ready to pay for it'

In a development of no little significance in the evolution of the British press, the Financial Times this morning hiked up its cover price, not by just five or 10 pence but by a hefty 30 per cent.

The FT now costs £1.30 from Monday to Friday, more or less double the price of all its rivals in the UK quality press. The weekend edition went up from £1.50 to £1.80 on Saturday. The move will be regarded as brave by those in the industry who believe that newspapers are under-priced but runs an obvious risk of undermining circulation and, as a consequence, rates of advertising revenue.

Reaching the FT chief executive John Ridding, in order to question him on the logic of such a move, is not as easy as it should be, given that he works on the sixth floor and a failed generator has paralysed the lift at the paper's Southwark Bridge headquarters in London.

Sitting at a circular table in his office, he appears confident that his readers have deep enough pockets to take the hit. "I studied economics, and chapter one is that you put prices up and demand can fall," he admits. "But we do believe in the value of FT content, we do believe people value it and we do believe they will be ready to pay for it."

The content within the pink pages of the paper that began life in 1888, styling itself the "friend of the honest financier and the respectable broker" is now generated by a round-the-clock international news gathering team and underpins deals worth billions of pounds.

"We have invested steadily, building a global operation with bureaux and reporters and editing operations around the world. That has given us a 24-hour rolling news operation with hubs here, in the homeland, and in New York and in Hong Kong," says Ridding. "We do that because our audience has become increasingly global, and, frankly, our readers demand quality news and analysis wherever it happens."

If the audience is going to make such demands then they should pay for the service. "Sustained quality journalism on a global level does actually require sustained investment and I'm a strong believer that quality journalism is valuable stuff."

As he looks across at the takeaway coffee cup on his desk, the FT CEO makes the case that other print products could also argue they are sold too cheaply. "Quality journalism is undervalued. People are making decisions and forming views – this is the information age after all. Quality, independent, accurate information is valuable stuff. I've got my Starbucks over there and it's a lot more expensive than newspapers and magazines."

The FT is, though, in a slightly different position to the other quality prints. For one thing, it was already the most expensive paper on the newsagent's bottom shelf, with a wealthy readership that is less likely to baulk at being asked to give up a little more shrapnel.

It is also acting from a position of strength, being the one British national to put on circulation. Not only was its total sale up by 0.34 per cent year-on-year to 452,767, but its UK sale increased by 2.8 per cent year-on-year to 142,000. That figure was boosted by a smart DDB marketing campaign that morphed Richard Branson into Che Guevara, and graphically portrayed the FT's world as a waterfront of the landmark buildings of the global financial centres.

The story behind the FT's price hike is partly that it is trying to turn more casual retail purchasers of the paper into subscribers. The paper's subscription sales have risen by 18 per cent year-on-year and Ridding is keen to encourage more people to sign up to "FT Direct", which offers the paper delivered to your door before 7am. This service, which generates 10,000 daily sales, is to remain at £1 a day, and is being rolled out beyond the M25.

"In the new media age, the internet has put a lot of attention on knowledge of your audience and, in print, the best way of doing that is to build a strong subscriber relationship. Retail is great but you don't know who they are," says Ridding.

He is a journalist by background and virtually an FT lifer, having joined the paper in 1987 and held a portfolio of roles that includes Hong Kong bureau chief, Paris correspondent, deputy features editor, Korea correspondent and UK companies reporter.

A year into his tenure as CEO he can point to a decent set of figures, with profits up last year from 2m to 11m and advertising revenues continuing to emerge from a slump, up 9 per cent. He says that his days as a journalist continually help him in his new role. "I spent 15 years interviewing and talking to business leaders and that gives you a nice set of experiences and understandings of the various challenges and issues that come up."

Ridding has developed the nose of a marketer, constantly trying to develop the FT's footprint and enhance brands within the brand such as the How to Spend It magazine and Alphaville, its business blog. "How to Spend It is a fantastic franchise. There's a lot of spending going on in high end consumer goods," he says, pulling out last Saturday's "Boats That Rock" special issue.

He is keen to maximise the number of revenue streams that the FT exploits. Conferences and FT events provide a growth area. "Last week I went to a sustainable banking awards and it was really rather moving.

"You had bankers from all over the world doing projects which were environmentally or socially beneficial," he says, conjuring thoughts of hedge-fund managers sailing to work in their luxury yachts.

Not everyone is happy with the new regime at the FT, with its demands of multi-platform working. The paper, having introduced a programme of 50 job cuts last year, has also lost fine journalists in Africa editor David White and Peter Spiegel. Some insiders complain the paper cosies up too much to the US.

Yet Ridding keeps smiling. A paper that believes in market forces must accept that staff will leave as well as join. He prefers to talk of editor Lionel Barber's key hires such as chief foreign affairs columnist Gideon Rachman and chief Washington commentator Clive Crook, a former deputy editor of The Economist.

The FT's editorial team is "on fire", he says, pointing out that Sheila McNulty was business reporter of the year in the British Press Awards, while Gillian Tett picked up the Wincott award for financial journalism.

The website, FT.com, has 90,000 subscribers paying a minimum of £99-a-year, a fact which no doubt helped convince Ridding that a £1.30 price for the paper was sustainable. FT.com now produces 60 videos a month, specialising in filmed interviews with business leaders.

Ridding thinks he can charge more, partly because of the growing public interest in the workings of business. He talks excitedly about the "showdown" on BBC1's The Apprentice, due to be shown that evening.

"One of the things we are trying to hook into is that business has gone mainstream. The success of these programmes tells you just how business has become intertwined with very large sections of society," he says.

"That's great, because that's our franchise, that's our thing."