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The Financial Times (FT) is now earning more revenue from digital than print, The Guardian reports.

In doing so, it becomes the first legacy UK newspaper that can claim to be a digital-first content business.

The FT’s strong digital performance owes much to its paywall strategy. Its content – most of which is hidden behind a strict paywall – accounts for 60% of revenue now. Meanwhile, total paid circulation, which includes print and digital, is at 843,000, up 13% year-on-year. Three-quarters are these are digital-only subscribers.

A high price allows the FT to reap substantial revenue from subscriptions. Digital subscription tiers range from about $5 a week for a standard package to close to $10 a week for a premium package. (The New York Times about two-thirds as much for a basic subscription and half as much for premium.) 

However, celebrating this milestone also masks an unpleasant fact. Achieving more revenue from digital than print is impressive, and reflects the FT’s adroit and agile adjustment to the digital world. Yet framing it this way also disguises an unpleasant fact — the precipitous drop of print revenue, as shown in the chart above.

Many digital media companies have embraced monthly and annual subscriptions. This business model allows digital media companies to provide a premium experience that offers more than the basic, often ad-supported service level.

Subscriptions are enjoying a new prominence as a revenue model for digital content and apps. Internet companies are exploiting the opportunity to boost ARPU (average revenue per user), thanks to recurring payments from a subscriber base.

BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on subscription revenue that looks at how prominent players in five separate categories have tried to build a subscription-based revenue stream alongside ad-based businesses: the categories are video, music, news publishing, social networks/messaging, and dating apps.

Here are some of the key takeaways:

  • Most companies operate on a “freemium model.” Subscriptions typically operate alongside an advertising business.
  • Success in freemium boils down to offering a core audience exclusive value that can only be accessed beyond a paywall. The key is to target the most loyal audiences, and sell them on an expanded offering — bundles of features or content — that they find irresistible.
  • Some publishers and apps have had mixed results with subscriptions, and vary in terms of how hard they have pushed them. Part of the problem is that ad-dependent companies are worried about limiting audience if they pack away too much value into a subscription tier.
  • The proportion of paying subscribers within the total user base varies considerably across digital media industries. Each category is obviously different, and won’t face the same challenges and opportunities in dialing up the percentage of subscribers and subscription revenue. Here are some of the proportions of subscribers in apps’ user bases: Spotify (25%), WhatsApp (21%), Pandora (5%), Match Group (5%), The New York Times (3%), and LinkedIn (2%).

In full, the report:

  • Analyzes the most common subscription-based digital media revenue models
  • Explores the drivers that allows some subscription or freemium business models succeed
  • Explains the revenue mix and business opportunity in several key digital media industries
  • Outlines companies that have succeeded with subscription-based business models

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