Future chief: we are best-placed to charge for online content
LONDON - Future, the special interest publisher, is experimenting with paywalls as part of a "do and learn" approach to solving the problem of charging for online content, said chief executive Stevie Spring today.
Spring was talking after unveiling the third set of annual results since she joined debt-loaded Future, which operates in the gaming, craft, cycling, photography, music and film consumer sectors with titles such as Total Film and Classic Rock, in addition to owning a custom publishing division.
Although Future's pre-tax profits dropped 61% to £3.7m this year, the company is swimming against the trend of a shrinking magazine industry, and recently launched The Knitter and Triathlon Plus in print and PhotoRadar online.
Spring said: "I think people are writing off the physical artefact of a magazine inappropriately. Future will have a balanced portfolio of print and other things for a very very very long time."
Spring is proud that The Knitter is already cash positive in contribution terms, yet print advertising revenues at the UK- and US-focused group are down 12% to £36.3m.
Like other media companies, online growth is only partly offsetting print's decline. Traffic is up over a year from 18 million unique users across Future's sites to 27 million, and online advertising revenues grew by £1m to £10.6m - taking a 23% share of total ad revenues.
Future's online strategy is not about selling cheap cost-per-thousand banner ads, claims Spring, but about "allowing our partners to make the most of our audience" through creative solutions such as microsites, client-funded programming and specials.
Spring argues Future has lots of potential when it comes to making money out of online readers, claiming that unlike News Corporation, her company does specialised, "must-have" content that is not easily substitutable elsewhere.
"There's a lot of bollocks talked about whether or not you can charge for content online. Most members of the public think they pay for online because they think they've paid their £10, £20 for broadband and that's their library pass and everything else is free.
"The basic laws of marketing say that if I can get something that's substitutable cheaper, more easily, whatever, then I will do."
"So if you're asking me for a comment about Murdoch and his paid-for news, I think the chances are slim or none because it's so ubiquitous, it's so generic.
"When you come to our content and the reason that we can charge an average of five pounds for a magazine is that we do very nice, very must-have, very special content, and if anybody is going to pay for anything they are more likely to pay for that. That's why we use the word prosumer [to describe Future's audiences], it's much closer to business-to-business [publishing]."
Pressed for examples of Future's online consumer revenues, Spring cites its on-console magazine for Sony PlayStation 3 owners Qore, which is £2.99 per issue, and the Classic Rock album preview club.
While she admits that "nobody yet has a sustainable proven business model for paid-for content online", Spring believes that Future has the right content so the challenge is to find the right charging strategy by experimentation.
"Once we've got payment methodology there - such as micropayments - I think we are better placed than any other media company to charge for our content.
"We are doing experiments right across our portfolio. We're doing paywalls, we're doing 'you can only access this if you buy the print product', we're doing 'you can read this but if you want the archive you can pay for it'.
"We're experimenting in small places right across the portfolio, because we don't have the answer yet. Our strategy online is do and learn. We're learning as we go along."
While bullish on Future's prospects, Spring is pessimistic on the general advertising and economic outlook for 2010 due to ongoing problems in financial markets and impending government spending cuts.
"I still think that those green shoots that everybody is talking about are weeds. I still think that the advertising dollars that are coming in pre-Christmas are 'desperation dollars', they're people chucking money pre-Christmas to make sure they have a decent Christmas.
"I think you would be a bloody brave man to think that next year was not going to be challenging across every sector including advertising."
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