“Don’t expect help from the disruptors”: The FT’s chief executive on AI, “loyalist” readers, and its U.S. expansion
There has been a remarkable amount of consistency at the Financial Times and I’m not just talking about the pink paper, which celebrated its 130th anniversary last year.
FT Group CEO John Ridding has been chief executive since 2006 after first joining the news org as a reporter in 1988. The FT’s strategic and editorial priorities have not bounced around much either. The global business leader emphasized subscriptions early and has been bringing in more digital revenue than print for a while now. It’s been owned by the Japanese company Nikkei, Inc. — an employee-owned company that publishes The Nikkei newspaper — since 2015.
That’s not to say the FT hasn’t moved with the times. Amid a cost of living crisis, the FT said the name of its magazine “How To Spend It” no longer reflected the “changing times and priorities” in 2022. The weekly announced a rebrand to HTSI,1 with the FT telling readers “to interpret the ‘S’ in line with their own deeper interests.” (“The newspaper suggested possible definitions of HTSI include how to style it, how to save it, or how to steer, surf or savour it,” The Guardian quipped at the time. “Other potential reader interpretations – such how to splurge it, how to snort it, or how to steal it – did not make the press release announcing the changes.”) The FT’s enterprise division also rebranded as FT Professional last year. (Group and B2B subscriptions account for roughly 75% of the FT’s paying readership.) And FT Group, which has invested in data science, paywall innovation, and offering its own consulting services to boost business in recent years, recently announced a new corporate venture arm.
The FT now has more than 1.4 million subscribers, including more than 1 million digital subscribers. You’ll also hear about “global paying audience,” a metric used by the FT that tracks the total paying audience for its journalism, products, and services. The figure — currently 2.6 million — includes subscribers but also people who pay for FT content in other ways, such as through FT Live events or FT Specialist services. The FT has set a goal of reaching a global paying audience of 3 million by 2028. (Nikkei has adopted the metric as well, a spokesperson confirmed, and the FT and Nikkei have a combined “GPA” goal of 10 million by 2030.)
I spoke with FT Group CEO John Ridding soon after he’d returned from Japan, where he’d been meeting with Nikkei leadership. Our conversation, edited and condensed for clarity and to remove brief asides about household pets, is below.
At the same time, the relentless disruption in our industry and, indeed, in the broader environment from pandemics, war, and inflation, requires fast decision making and short-term flexibility to combine with that long-term strategic consistency. I think that’s been another feature of Nikkei’s ownership. It might seem surprising to lots of folks, given the perception that Japanese companies can be consensus-driven and therefore sometimes slow to act, but that hasn’t been our experience at all.
Whether it was the rapid decision when Covid struck to sacrifice profit for sustained investment or a decision last year to enable us to use our profit to pay an all-staff bonus to help offset the impact of inflation, we’ve seen supportive decisions. And, of course, having an owner in the same industry provides significant potential for collaboration, whether it’s tech development, the current focus on AI, joint sales and events.
As ever, the figures prove the point. We’re eight years since Nikkei’s acquisition. During that period, our group revenues have more than doubled. Our paid circ almost doubled as well. And our headcount has grown by a third. I think those foundations — that ownership model — have been incredibly helpful in dealing with all of the disruption and challenges that we’ve seen to date and continue to see.
I should point out it’s a mutual benefit. Nikkei have been pursuing a similar strategy, drawing on some of our learnings from the art and science of subscriptions. They broke through the 1 million digital subscription level themselves last year and are now quite possibly the biggest digital news subscription organization in Japan.
We’ve also doubled down in our coverage of AI through the appointment of specialists, including an AI editor. I’m obviously probably a little bit biased, but I think our coverage of AI and its impact — not just in business, but society — has been compelling and essential reading.
In your [email before our conversation] you also asked about the perils, and I think there is plenty of peril out there for the ecosystem. I think this is another defining moment in the relationship between news media and big tech. I’m confident about the FT; we’re well advanced in our transformation, we’ve got deep roots with readers and partners, and we have a brand and identity that differentiates us via our journalism and with personality and our global perspective. But I am worried about the ecosystem. I think there’s a risk of disintermediation. The reality is that big tech and social media are failing, again, to do the right thing. The other reality [is] that regulators are off the pace. With very few exceptions, big tech and social media are falling short of their responsibilities and I think, more surprisingly, their own self-interest.
If you train your AI program on someone else’s content, it seems clearly correct that they should receive recognition and payment. And if you talk in concerned tones about the danger of disinformation, it also seems correct to do a better job of policing it and supporting the quality sources. Or at least not compromising the quality sources of information that offset disinformation. Even through the lens of self interest, if you need to improve the reliability of results from Gen AI programs — and they are riddled with errors, not just biases, but mistakes — you need to verify those programs against reliable news and information sources. If you undermine the ecosystem that produces it, that feels frankly pretty short-sighted.
There was, I thought, a really interesting session in the House of Lords with U.K. publications, including the FT, and they were pretty forthright in their comments. One industry executive on the panel, I thought, put the point rather well: there’s a danger that the dog will eat its own tail. The argument is that if it develops in the way it looks as though AI developers want it to develop — where they just appropriate other people’s work without compensation — then they’re going to undermine the news content on which their models are trained.
The big players are investing big time in AI while degrading the ecosystem that supports it. And it’s unfortunate because there’s actually a real opportunity to do the right thing. You ground or validate AI programs, you pay providers of quality journalism to affect that grounding, and I think this validation represents a significant difference from the intellectual property wars round one, which was all about the volume of traffic online. There’s a mutual interest in the verification and validation of Gen AI content against trusted sources.
And what’s particularly frustrating is the epic sums being invested in AI by big tech and, at the same time, the justification when they talk about the challenges of paying license fees or even engaging in the same level that they did with news media. They talk about “financial pressures,” which, you know, you want to say “seriously”? The individual revenues for each of these big players, and their net income, probably match those of the news media industry in total.
Do you have advice or thoughts for people who don’t have as advantageous of an ownership model? Especially in terms of communicating what you’ve just communicated as important for long-term sustainability.
It wasn’t that we were all-seeing when we started our digital transformation. Our platform was on fire, we were seeing structural change in key revenue lines that was moving fast and deep, and we were breakeven — or not even breakeven, in some phases. So we had to make some big calls, fast. Ultimately in moments like that, you have to think very hard about what is your core value and ours was brilliant journalism. So we weren’t going to give it away. We were going to double down, raise prices, and charge for that journalism online – even though that was controversial at a time when the mantra was “the Internet wants to be free.” It quite quickly became apparent that alongside the online revenues, and just as valuable, was the data and insight into our readers that the new subscription model generated.