ITV to drop subscription model for Friends Reunited

by Maria Esposito, Brand Republic 31-Oct-07, 09:05

LONDON - ITV is set to ditch Friend Reunited's subscription model in response to growing pressure from free social networking sites such as MySpace and Facebook.

It is understood that the commercial broadcaster is planning to drop the £5 annual subscription charge for Friends Reunited.

Earlier this month, ITV appointed Gary Cole as the head of revenues for ITV.com and Friends Reunited, tasking him with building a strong online sales team in order to maximise revenues for the two.

This expected move away from a paid-for model comes as Friends Reunited is increasingly overshadowed by popular social networking sites MySpace and Facebook.

Friends Reunited, which was launched in 2000, boasted 12m users when ITV bought the site for £120m in December 2005 and it enjoyed phenomenal success.

However, the site now has only 9m registered users while MySpace has 100m users and Facebook has accumulated over 50m users.

In August, Michael Grade, ITV executive chairman, already hinted that some areas of the site would be made free for users. When announcing the channel's interim results, Grade said that some elements of Friends Reunited would be opened up.

ITV is looking to make £150m in online revenues and at the recent AOP conference Jeff Henry, director of ITV Consumer, said the broadcaster wanted to be the leading provider of free entertainment in the UK.

When asked how ITV were going to update Friends Reunited in the face of the social media challenge presented by Facebook and MySpace, Henry said traffic was robust and that despite suggestions otherwise the site was "not languishing".

He said he knew the challenge was to take FriendsReunited to the next generation, but at the time he would not say how, only that it was well in hand. Commentators expected this to include making the service free before it lost its audience to rivals.

Friends Reunited will be able to attract more online ad revenue if it drops its charges and boosts user numbers.

ITV is not alone in axing its subscription model in favour of free content. Earlier this month, the Financial Times decided to offer users partly free access, as a pre-emptive strike against The Wall Street Journal's rumoured switch from paid content.

Rupert Murdoch is expected to make The Wall Street Journal's website free, after buying the paper's owner Dow Jones earlier this year.

Since mid-October users of the FT.com website can view 30 articles a month for free. Previously users had to pay up to £200 for the privilege.

The FT was also prompted to cross over to free content by The New York Times' decision to drop its paid-for model last month.

ITV could not confirm plans to drop Friends Reunited's subscription model but said that it was currently looking at making more parts of the site free.

Comments

Peter Martin - 31/10/2007

OK. Now I will join. 'nuff said about online models?

Alex Donohue - 31/10/2007

This could just be me, but the last time I was on Friends Reunited I couldn't find a single person in my school year who'd updated their profile in the last 18 months! There are other more profitable ways for FR to generate revenue than charging an annual subscription fee. Besides, having to pay to reply to a message from someone you can barely remember seems daft when their photo is (probably) on Facebook.

Peter Martin - 31/10/2007

I have now 'joined' and have to say it was an eye-opener. I even have found a guy I went to school with over 40 years ago. I'd like to send him a picture I found recently of him and me in a production of the 'Knave of Hearts'. And this is where they are being sneaky/clever... £7.50 to get in touch!

Nigel Parkes - 31/10/2007

I've always wanted to know why 3 out of the 4 people on their banner are wearing sunglasses?

Philip Smith - 01/11/2007

At the risk of diverting a sensible conversation about online business models and Peter's school days, I can answer Nigel's query. One of the co-founders of Friends' put the logo together in a rush and used a family snapshot to complete it. The family and friends featured were all on a ski-lift in the picture - hence the shades. Not sure how many multi-million pound brand logos are put together that way, but, for the original founders at least, it works.

Peter Martin - 01/11/2007

Don't forget Alex...HE started it! (Did not..did too...) I will now write out a hundred times: 'I must not be flippant and stick to the issues...'

Philip Smith - 02/11/2007

No problem with flipancy at all, Peter. To be honest, when I first joined FR back in the day, I was contacted by a former teacher of mine - desperate not to relive that experience, I have rarely been back. If it was only school mates who were on the site, I might have given it more of my time.