Paper money: How the Financial Times made print profitable

George Adelman, Principal at FT Strategies, was recently joined by Janet White, Print Director at the Financial Times (FT), for a conversation about her remarkable career journey, the evolving landscape of print media, and the strategic direction of Print at the FT in these changing times.

In this interview, Janet highlights the significant transformation facing the print media industry, driven by digitalisation, changing consumer behaviours, and economic pressures. Despite these challenges, the FT has managed to navigate declining circulation and revenue, cost pressures, and the unique constraints of producing its iconic pink newsprint. Janet pointed out the resilience of niche and specialised publications, a category the FT fits into, which has allowed it to maintain a strong position in the market.

The conversation also delves into the operational strategies employed by the FT to optimise its print structure, including decisions to trim editions and focus on digital offerings where appropriate. These decisions were guided by economic viability, reader demand, and the sustainability of distribution networks, particularly in challenging markets like the US and Asia.

Janet: Thank you very much. Of course! I have been at the FT for a long period of time — more than 35 years. I first joined when I was temping and worked in Bracken House before we moved down to Southwark Bridge.

I qualified as an accountant while I was working at the FT. Part of my career was in Finance, as a Finance Business Partner for the circulation area of the FT, so when I moved into Commercial in 2012, I think I was ideally placed to know how the business worked from the bottom up and I've been in Commercial since then in a number of roles.

When I first joined the Commercial team my role was the Director of Strategy and Commercial development and I looked at projects across the business and then became more and more involved in the circulation side of things. I became Sales Director for circulation first and then about 18 months ago took on the operations as well. Now my role is the responsibility for the newspaper as a product, the relationship with the Commercial team in Advertising, the [Print] Editorial team and then, of course, all of the production and the P&L.

Janet: There's no doubt that there's incredible and increasing pressure on the ecosystem for print. So yes, of course, we've had to manage a decline in copies and a decline in revenue — but in the last 18 months, it's been more about managing the inflationary price increases: the cost of energy. The main driver of that is the conflict in Ukraine. We saw our newsprint prices go up by 81% year-on-year with the energy impact being £7m across the P&L.

We are fortunate that we have a board that backs the newspaper and it is very committed to maintaining the circulation, so there was lots of looking at different suppliers. The FT is limited by the fact that it is pink and there are not very many producers of pink newsprint. We didn't have a lot of options as far as moving that but we did have options for a magazine paper because we have a number of supplements in the newspaper.

It's always been a challenge to manage the declining circulation. A lot of what's happened in our business was actually deliberate. We removed a lot of circulation to the point that we are pretty much at our core readership, so we don't have the same challenges as someone who might now be looking at moving to digital. Fortunately, the cost pressures paper has shown has now come down in three consecutive negotiations, and the cost of energy and the surcharges for things like delivery to a customer's home have come down as well.

We definitely see resilience in our readership too. During the pandemic, we saw circulation numbers that were equal to what we had in 2017, so we actually saw growth and I think that is a big testament to the quality of the product and the fact that we do hold a niche position not only with the newspaper but with our magazines as well.

If we look at the UK market, which is our main market, there isn't really any product on the market that competes with the FT Weekend for instance. The breadth of content isn't there and so I think that's one of the reasons why we're so resilient. The other benefit we have is because of the positioning of the FT and its magazines, where our advertising revenue in print is resilient and print advertising still exceeds digital advertising.

Janet: We do a strategic plan every year — that's normally a five-year time span. The newspaper is very much still part of that. Somebody did ask me the other day how long I thought the newspaper would be around for and I can't say, but print still is the backbone of the FT and we have a very loyal readership. I definitely see a place for the newspaper even 10 years out, particularly FT Weekend.

I think the best way that we can manage the circulation is to look at combining products in selling bundles. So we already sell bundles with standard FT.com and the Weekend. We have a digital Edition which can reach people whom we may not be able to deliver to anymore, from Monday to Friday and then take FT Weekend in print. The thing is to be flexible as we go forward with the offer of our product mix.

Janet: Most of the decisions that we've made about where to distribute and where to publish have been driven by a combination of the demands of our readership and the economic outlook. We have the benefit of having data analysis that enables me to look down to a city and see what the economic viability of delivering that copy was. For instance, we decided for a combination of economics and sustainability reasons to remove all flight markets (delivery by airmail) from the US in 2017. It saved a tremendous amount of money, and yes we definitely went to readers and said “We're very sorry, we can no longer deliver a newspaper to you” but we had the digital edition and products to offer customers in its place.

That allowed us to concentrate on major cities where we want to remain. In the US as an example, we want to go beyond the Eastern Corridor (New York, Connecticut, Massachusetts down to Washington DC). So we looked at the infrastructure and where we were printing the newspaper, how far we could go and looked at concentric circles and the viability of the volume within those circles. So it was a big exercise to look down to the customer level of what we should be doing so that we could be viable going forward.

Janet: I have regional Operations Managers and Sales Managers in each of the four regions where the FT publishes and it’s completely different in each one of those regions.

An interesting example in Asia — the biggest challenge we have is home delivery for our subscribers because the gig economy has changed so much of the availability of people to do the delivery. There are many options for drivers to not be working at 3am and to earn a little bit more money with a much more flexible role doing something like Uber Eats or whatever the local equivalent is.

In the US the challenge is with regional publishing and the fact that we had our copies of the FT newspaper delivered with the local and regional publishers’ editions, and they are under such financial pressure that, in many instances, they have cut the number of publishing days. So the challenge for us then as a six-day publication was that we needed to find alternatives for very loyal readers.

In Europe, we are ideally placed because we are the only English-language international publication that's still widely available, as the other publications have pulled back. The challenge we face in Europe is again the delivery, in the fact that we rely on local regional publishers who publish much earlier in the day than we do.

That brings me back to one of your earlier questions about whether or not the website fulfils the need of “breaking news”. It very much does — but there's also then a consideration of what the newspaper becomes. We can't publish so early that we become some kind of a digest because we would lose our credibility — It is a difficult balance, timing the publication.

Janet: The advertising that is the most reliant on audited circulation numbers is luxury and consumer. That was a big challenge for us because it's a very much part of the backbone of our advertising revenue. The fact that we could give analysis of what our core audience is — the exact audience the advertiser wants to reach — allows us to provide evidence of the quality of the audience instead of mass volume.

If we lost two copies in Wyoming for instance, it didn't really impact who that advertiser was reaching and it also allowed us to be very targeted on where we were marketing our subscriptions. We could say that where we wanted density, in Manhattan, for example, we could double down on offering subscriptions to those readers there to grow the volume and the density which also suits the distributor.

Janet: Our own strategy is to work with printing partners that we feel have longevity. So for instance in the UK, we print at three of the News UK (who are part of News International sites) because we can see that they produce The Times and The Sun. That means that they are going to be around, so I would say, look at the financial viability of any partner that you're working with. If it's your own facility, understand the economics of your facility and be very clear about what levers you have to pull.

I would say we do the same in the US, we very much look at other partners. We talk to the Washington Post, the New York Times, or we print with the San Francisco Chronicle. We are looking at who we feel has the ability and the capacity to be around in five to ten years time.

Janet: Sustainability has already had an impact on our decisions. It's definitely something that is a concern for the FT. It's a concern for our advertisers and it's a concern for our readers. Legislation will drive a lot of what happens with sustainability in our decisions as well. I think we are far off from having the requisite standards across the globe to make it easy to make those decisions, but we look at every supplier that we work with.

The FT works with a company that plants a tree every time they cut one down for instance. We've recently just moved to a magazine publisher that will be carbon neutral by 2030, they will have all green energy in their facility for producing the magazines, they also only use electric vehicles. So, if the opportunity arises and the third party that we could potentially work with is sustainable, they are the first choice for the FT. It comes with a price tag quite often, but we have to weigh out the longer term and the fact that you can see that they're investing in the future of their business.

Sustainability is a very big topic. I'm part of a number of panels looking at the sustainability of our business as a whole. We take every opportunity to move to third parties who are sustainable, and who are investing in the future of being sustainable.

The biggest challenge is in the distribution Network because there aren't very many distribution companies that can actually pivot and completely move to electric vehicles for instance. We have in the last 12 months moved to a distributor that uses bicycles only but that's small because as you appreciate our circulation is across a very wide geography. Not only being five editions internationally but across the whole continent of the US. So it's challenging but it's definitely at the forefront of my mind and the board's mind that we are as sustainable as we possibly can be and also to be very careful that we don't try and greenwash our customers. So, we're very clear about the fact that yes part of our business is sustainable, but not all of it.

Janet: FT has been digital first for such a long time that we have a lot of experience in transforming the business to a subscription model because we were reliant on advertising revenue before that. This is why it's a bonus to the FT that print advertising is still as strong as it is because predominantly we are a subscription model for the website. We're very fortunate that we also have a very strong, very committed readership that wants to continue reading the newspaper.

I have just been to Tokyo where I visited a number of clients. We have copies in very high-end hotels in Tokyo. I went to see the new Bulgari hotel for instance where we have copies. It's an incredible place, very ‘luxury’ as I am sure you can imagine. In our conversation with every client, we would always ask: what are your clients asking for? What are the guests requesting when they come in? They say they regularly now request the Financial Times since they're seeing a change in the demographic of their clients. So they're seeing more English-speaking people who are travelling and staying in Tokyo [hotels] asking for newspapers.

They still want the tactile experience of reading a newspaper. If you're in a hotel the copies are available in places like the breakfast room and in lounges. So that very much fits that mode. We also find that subscribers still want a 7 AM copy delivered. They still are very loyal to the FT.

The hybrid model works for us. We've just launched a new product called theDigital Edition app (or e-paper as sometimes known in the industry), which means that we're very much looking at products to serve what our readership wants and at what price point. We look at the Digital Edition as an entry-level product where people who may not be comfortable with looking at a website, can move to the Digital Edition, which is a replica of the newspaper and we hope over time they can move to a completely digital read.

Also, we still have the FT Weekend in print because that is an experience that's richer in print. The magazines are much richer in print; they translate well into the Digital Edition, I have to say, but it's still an experience that people want.

We are a premium product and I think that's another reason why we've been able to sustain our readership. We are premium-priced, at the end of last year our UK retail products for FT Weekend went to £5.10 a copy. It was a big decision for us to move above the five-pound mark — we haven't seen any negative impact of that. We have an incredibly loyal readership for FT Weekend in the UK. So as long as editorial keeps producing the amazing product that they do, I think we will be able to sustain that premium.

Janet: We use our finance systems as a database to hold all of the information about our readership in print so I can look at a country in APAC or a city in the US and know not only how much the average cost of that copy of the newspaper is but also the marginal cost of delivering that newspaper. If we're looking at doing something tactically with our B2C colleagues such as marketing the newspaper to subscribers, it's very important to understand the economics of how much it is. All of that data is held in our finance systems. I've got an analysis that gives me contributions by country, city or by channel.

We have five channels of sale for our newspaper at the FT and I can drill down to that level. I think to have the analysis from an economic point of view and also an operational point of view. It’s also important to have operations managers who know their local market and know other publishers and distribution networks. They are able to make recommendations to me about alternatives. For instance, to know when a small region of publishers decides that they're not going to deliver on Saturday anymore is key. So, it's both the operational knowledge and economic knowledge that we have that has allowed us to make tough but informed decisions.

Janet: What I love about my job is that there isn't a single day where I could say, “This is what I'm going to do today.” because something that may never have ever happened before, happens because it is an industry that is in such flux and there is so much pressure on so many parts of the ecosystem to print, that it's exciting! It's never the same and that's why I love it.

George Adelman

George is a Principal at FT Strategies, he joins us from Monitor Deloitte with over a decade of experience in strategy consulting and in-house advisory. Leading strategy development, service design and digital transformation teams, he has advised senior leadership from across both the public and private sectors.

Janet White

Janet is Print Director at the Financial Times and has dedicated over 35 years to the organisation. Janet's in-depth understanding of the business's operations has been instrumental in her success in various roles, including Director of Strategy and Commercial Development and later Sales Director for circulation, before taking on her current role overseeing newspaper production, commercial relationships, and operations.