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Business content on MediaShift is sponsored by the CUNY Graduate School of Journalism, which offers an intensive, cutting edge, three semester Master of Arts in Journalism; a unique one semester Advanced Certificate in Entrepreneurial Journalism; and the CUNY J-Camp series of Continuing Professional Development workshops focused on emerging trends and skill sets in the industry.

There was a time in the not-so-distant past when app makers were fighting to get featured in Apple’s App Store, and crying out in protest if their app didn’t make the cut. So it’s quite a turnabout to talk to folks at the Financial Times, who have not only removed their apps from the App Store but have thrived with an HTML5 web app that lives outside of the App Store completely.

I recently sat down with Rob Grimshaw, managing director of the one of the world’s leading business websites, FT.com, to talk about all things mobile. Pointedly, Grimshaw was making the trip to Northern California from his home base in London to visit Google and talk to them about Android apps — and not making a stop at Cupertino, Calif., where Apple is headquartered.

FT.com has a long history of charging for subscriptions, going back to 2001, and it’s brought that expertise into the mobile space. Grimshaw was full of statistics about mobile usage for FT.com, including these:

> 20% of all page views for FT.com come from mobile devices
> 30% of all page views seen by paid subscribers to FT.com are on mobile devices
> More than 1 million downloads for the FT apps for iPhone and iPad
> More than 500,000 visits to the web app over the past 3 months
> 15% to 20% of new paid subscribers come from mobile devices

Would the FT consider going back to the App Store if Apple changed its Terms and Conditions so that they could see the data on subscribers?

“We never said, ‘We’ll never use iTunes again!’ Pragmatically it makes sense to have the Financial Times available in the maximum number of outlets,” Grimshaw said. “That’s how we’ll reach the maximum number of customers. But each channel has to be right for us as a business. If that were to change, then our outlook would certainly change. So far the web app hasn’t done us any harm. In fact, if anything, we’re better off right now. So we’re not crying ourselves to sleep every night about that.”

The following is an edited transcript of our discussion, including some video clips of some salient points he made about paid subscriptions, the FT web app, and the recent phone-hacking scandal in the U.K.

Q&A

What brings you out to San Francisco?

Rob Grimshaw: I’m here for a couple days for a series of meetings. The big focus is on mobile. We have a tremendous amount happening in the mobile space and it’s becoming strategically hugely important. We’ve seen a huge chunk of our readership move to mobile, about 20% of our page views come from mobile devices. And of our subscribers, over 30% of our page views come from mobile devices. So mobile is big news for us, and there’s a lot happening in mobile here on the West Coast (of the U.S.) so I’m here to talk to the big players.

You said you were visiting Google. What were you doing down there? Can you talk about it, or is it top secret?

Grimshaw: (Laughs) No, we were very keen to catch up with the Android team there. We’ve done tremendous stuff in the iOS space, and we’ve got our web app out, but we haven’t done enough on Android yet. The Android ecosystem is huge, and we’re just on the cusp of launching a Honeycomb application (for Android tablets) that should be out in the next couple weeks, and then after that a smartphone version will follow, probably late October, mid-November. There’s a big audience waiting for us there, in the Android world.

Grimshaw explains the history and lessons of the FT.com charging for digital subscriptions since 2001:

Grimshaw1.mp4

With your readership, do you have a good idea of who’s using Android devices vs. Apple vs. Blackberry and others?

Grimshaw: Partly it’s driven by the applications we put out, partly by the adoption of the audience. What we’re seeing is we have a legacy base that’s using RIM devices, Blackberry devices, still tremendously popular in the business world. Then you’ve got all the tablet users, who are mostly concentrated in the iOS environment with the iPad. We’ve gained a great audience among those users. We have an audience of wealthy early adopters so they can afford to go out and buy a new toy if they really want to. If they see something that will get them ahead in the business world, then they’ll go out and buy it.

That’s why we’ve had more than 1 million downloads in our iOS apps across iPad and iPhone and now that we’ve introduced the web app, we’ve had more than half a million visiting the web app already in only the space of three months. But it’s a very varied and ever changing landscape, and we see huge potential in Android. If you roll forward a year, it does look like a straight fight between Android and iOS.

So you think there might be potentially as many Android subscribers as you have using iOS eventually?

Grimshaw: That’s a good question. If I were to bet, I would say we will probably have more people coming to us from iOS environment than the Android environment for the next year or so, but I think that will even up, particularly as new devices come out. There’s now a selection of really quality tablet devices that have started to come through on the Android side. Certainly the Samsung Galaxy is a fantastic device, and if there is more like that we will see a big take-up.

When you talk about more than 500,000 people downloading your web app, how many of those are paying subscribers?

Grimshaw: The way we look at our audience is we break them up into anonymous users, registered users and subscribers. On the mobile devices, what we see is that the majority of page views, about 80% of page views, are from registered users and subscribers. So there’s big take-up with the mobile devices from our core audience. And mobile devices are proving to be tremendous acquisition tools for us. Each week we tend to see 15% to 20% of our new digital subscriptions coming direct from mobile devices.

Gramshaw talks about the FT web app and why they decided to leave the Apple App Store:

Grimshaw2.mp4

So in order to get your web app, people have to jump through some hoops, they can’t get it from the App Store. Were you concerned about that?

Grimshaw: We certainly haven’t had an issue with this, and it doesn’t surprise me. When you think about it, app stores are really an aberration in the world of the web. The web is about these open where you can find anything through search. App stores go right against that. They’re closed environments, they’ve got walls all the way around them. If you want to find something, you have to go in and use a pretty limited search function inside. You can’t do any promotion. You can’t link into it. It goes against all the philosophies of the web.

What we found as we launched the web app was that all the traditional tools of web became available to us again. We could do simple email promotion, we could link into it, and in the future we’ll be able to make it available through search. We’ve also exploited the traffic we get through the browser. About half the traffic we get on the iPad goes directly to our website anyway. We just put an overlay message asking people if they want to look at our web app, go to app.ft.com. So discovery has proved to be no problem whatsoever. After launching our web app, our mobile traffic has expanded, we’ve acquired an audience that wasn’t there before.

So this idea, ‘you must be in an app store in order to be noticed’ — it’s a bit of a myth.

Do you think app stores might eventually become obsolete, because they do go against the open web?

Grimshaw: Now we’re getting to the point where the browser on the latest mobile devices is capable of supporting HTML5 and all those features that go along with that. So you have to ask the question: ‘So what’s the app for?’ Why put this native wrapper around this code and put it in this restrictive environment? Why not just put it in the browser?

I’m sure there will be circumstances where apps make perfect sense, some advanced gaming scenarios. But it will become much less black and white, and what you’ll see over the next year or two as developers sink their teeth into HTML5, a lot of functionality that a year ago was ‘app only’ will become normal in the browser. I think that’s a good thing. It will create a much more diverse marketplace.

Tell me about advertising and how that’s changed over the years. You have this anonymous audience, registered users and subscribers. How do you sell those audiences to advertisers?

Grimshaw: We’re able to give advertisers tremendous insight into the audience. There is an irony about advertising which is that when we started to push very heavily on subscriptions back in 2007, we thought we might take a hit in advertising. In fact, the experience has been entirely the opposite. The more we grow the subscription business, the more advertising we sell. It’s because we are able to create scarcity in a marketplace where there seems to be none.

The registration data, the subscription data that we have in our databases allows us to offer advertisers very precise targeting segments, which you simply can’t find anywhere else. When that’s combined with behavioral advertising and other tools, we’re able to offer this very rich and unique service to advertisers that they value tremendously. When you say to an advertiser, you can get rid of your waste and go right to your target audience, they’re always prepared to pay for that because that’s what every marketing manager wants.

That was your issue with the App Store. If you didn’t get the data on your subscribers, you couldn’t target ads as well to them, right?

Grimshaw: For sure. That’s one of the reasons that the direct relationship with the consumer is so valuable. There are also important things on the marketing side as well. If you’re running a subscription service, then retention is a major concern. It’s pretty hard to run a retention program when you don’t even know who your customers are. There were things in there [the Apple Terms of Service for iTunes] that were very difficult for us, and that’s one of the reasons we decided to go in a different direction.

If Apple came back and said, ‘We’ll share the subscriber data with you,’ would that make you change your mind on being in the App Store? Or are you pretty happy with the way things are?

Grimshaw: Well, given how well we’ve done with the web app… [laughs]. At the end of the day, this is about specific terms and conditions. We never said, ‘We’ll never use iTunes again!’ Pragmatically it makes sense to have the Financial Times available in the maximum number of outlets. That’s how we’ll reach the maximum number of customers. But each channel has to be right for us as a business. If that were to change, then our outlook would certainly change.

So far the web app hasn’t done us any harm. In fact, if anything, we’re better off right now. So we’re not crying ourselves to sleep every night about that.

FT.com has been very successful setting up paid niche sites and communities. How have those been doing?

Grimshaw: They’ve been going very well. The best examples are China Confidential and Brazil Confidential. What’s clear to us is that people will pay for great content which is extremely relevant to what they do. The more niche the focus, the more valuable it becomes. One of things that web publishing makes you conscious of is that people are very focused on particular areas. Once you start looking at the data, you can see there are areas of content that might not have huge volumes, but are tremendously attractive to particular audiences.

Good example at FT.com is our commodities coverage, which is not the most glamorous or high trafficked area, but it’s one of the most effective areas in converting new subscribers. So it makes perfect sense to look at some of these areas and turn them into deeper, more discrete sites. China Confidential and Brazil Confidential have been very successful and became profitable almost the moment they launched, and we have an opportunity to grow a constellation of niche services.

Grimshaw talks about how the FT has tried to be above the fray in the recent “hackgate” scandal that has consumed the newspaper business in the U.K.:

Grimshaw3.mp4

*****

What do you think about the paid content strategy by FT.com? Their move out of the App Store and promoting a web app? What could they do better? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit. and Circle him on Google+

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Business content on MediaShift is sponsored by the CUNY Graduate School of Journalism, which offers an intensive, cutting edge, three semester Master of Arts in Journalism; a unique one semester Advanced Certificate in Entrepreneurial Journalism; and the CUNY J-Camp series of Continuing Professional Development workshops focused on emerging trends and skill sets in the industry.

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