Examination of Witnesses (Questions 560
- 579)
WEDNESDAY 10 OCTOBER 2007
Mr Lionel Barber
Q560 Bishop of Manchester:
I wonder if you could go back a bit over the last 15 years and
talk a little bit about the circulation figures, both in terms
of the United Kingdom and overseas. I think it would help us to
begin to see a picture of when you began to increase your circulation
overseas and what the pattern of decline or otherwise was in that
15 years. I am aware that in August you had a boost in sales,
which maybe we can come to in a moment, but if we can go backwards.
Mr Barber: We had a boost in sales not just
in August, but we can come back to that, my Lord. Since 1992,
over the last 15 years, the Financial Times has lost circulation
in the UK by around 15%. That reflects a general trend in the
industry and we can talk about the reasons if you wish.
Q561 Bishop of Manchester:
I think it would be helpful if you could briefly say a little
on that.
Mr Barber: Reading habits have changed. Clearly
many more people are now accessing the Internet to consume information,
news and views, but also you need to look at the distribution
channels. The paper boy is not as ubiquitous in either the village
or in the suburb as he or she once was. I think also the rise
of electronic media, Bloomberg has been a very effective competitor
in the market, and that is really why we have had a few more difficulties
in the UK. I do not think it is also particularly easy to read
the Financial Times or any broadsheet on the Tube in London.
I think the free sheets have eaten away just a little bit at the
margin, and I also think for those of you who know the City of
London, you go into the trading floors now and you will not see
so many Financial Times; that was not the case 20 years
ago. People are expected to be at their desks and get their information
from a screen. All these factors have affected the UK's circulation
of the Financial Times but, at the same time, and I was
fortunate enough to be part of this, we have increased circulation
dramatically, particularly in the United States where we have
increased our circulation around four-fold to about 140,000. It
is slightly more than in the UK. Four years ago we launched an
Asian edition, that is selling around 50,000. That is also well
up on before. In Europe it has gone up slightly, it is around
140,000. Overall, the circulation of the Financial Times
currently is around 425,000 to 426,000, it fluctuates a little
bit.
Q562 Bishop of Manchester:
The particular boost which has happened, as I understand it—to
give you the figure, in August the year-on-year circulation was
2.51%—does that refer overall, overseas and UK?
Mr Barber: It does. Clearly, unlike Northern
Rock, we benefited somewhat from the credit squeeze.
Q563 Bishop of Manchester:
To pursue that line for a moment, when you look at the circulation
ups and downs of your particular newspaper, what are the things
which you feel help to boost the sales? Are there particular stories?
Is there anything which is particularly unique to the Financial
Times in terms of your marketing strategy?
Mr Barber: It is very simple. We have a competitive
advantage in that we are a really global newspaper. In an age
of globalisation we offer something quite different from anybody
else. We offer relevant, concise, authoritative, accurate information
with plenty of context. We encourage reporters across the world
to collaborate, so if we have a contested takeover for a Chinese
brewery, you are likely to have a date line or a byline based
in London, New York and Beijing. We have a global network of journalists
and they are very experienced. Many of them have been working
for the Financial Times 10, 15, 20 years and they are very
good. We have been particularly successful in America. For those
of you who are familiar with the US market, America, you will
know there have been some rather troubling instances of inaccuracy
even amongst the best papers.
Q564 Chairman:
We have just come back from the United States, so we had been
there for a week and, in fact, we went to The New York Times,
to whom you are referring.
Mr Barber: They have had some troubles and their
stock is in the basement. They lost their editor and managing
editor as a result of a journalistic scandal involving accuracy.
I think there are many people, readers in the United States, who
do not want to plough through thousands of words before they get
to the news story. These are also very fine newspapers, but we
have found that by selling ourselves as a global newspaper which
is concise, offering, if you like, a window on the modern world,
we have been able to do very well and attract not just readers
but advertisers.
Q565 Lord King of Bridgwater:
Can I clarify this point about being a global newspaper. Are you
the editor of the Financial Times worldwide?
Mr Barber: I am.
Q566 Lord King of Bridgwater:
The US edition carries a lot of common material, obviously the
reporting of the Dow and Stock Exchange and that sort of thing,
but then with a US section particularly, it is not the identical
paper, obviously?
Mr Barber: I hope the Committee forgives me
if I could offer a metaphor to describe the way the Financial
Times works in terms of the edition structure. We do have
a common content. The most important stories, including, by the
way, the decision by the Government to postpone the election,
that would have appeared prominently in all editions; the credit
squeeze would have appeared prominently in all editions because
it is one of those 20 to 30 stories that really matter and are
important. That is the common core, but then we obviously have
to tailor our content slightly to the local market, the regional
markets. The way I describe it is it is a little bit of lipstick
and eyeshadow for the front page, so you may have two stories
which are different. For example, today obviously we wrote a lot
about the Pre-Budget Report in the UK edition, but in the European
edition we wrote about the controversy over the EADS share dealing
and in America we wrote about the Coors, SAB Miller brewery merger.
These are light changes which, by the way, are quite complicated
to arrange in terms of production but they are important.
Q567 Lord King of Bridgwater:
You are around the clock, are you not?
Mr Barber: We have not talked about on-line,
of course, but we are a 24-hour news operation.
Q568 Lord King of Bridgwater:
I was not on that point, I am on the management point. Can I clarify
one point, who do you answer to? Who is the Chairman of the Financial
Times?
Mr Barber: There is someone who holds the office
of Chairman at the Financial Times, Sir David Bell, but
I do not answer to the Chairman of the Financial Times,
I answer directly to Marjorie Scardino, the CEO of Pearson, and
I work closely with the CEO of the Financial Times, John
Ridding.
Q569 Lord King of Bridgwater:
Is Sir David Bell on the board of Pearson?
Mr Barber: Yes, he is, he is an Executive Director.
Q570 Baroness McIntosh of Hudnall:
Can I ask you, this may be trespassing a bit into the on-line
area, but because your readership is probably quite specialised—I
am surmising—are they, as you perceive them, more or less
likely to want to gather their news from a multiplicity of sources,
including on-line? You talked about people being expected to sit
at their desks and get their information from a screen. Is your
readership particularly more likely to do that than perhaps the
more general readership of other newspapers?
Mr Barber: I can only really speak for the Financial
Times. There is no question that an increasing number of our
consumers, the people who read Financial Times material,
are gaining their information by looking at FT.com. For
example, this year monthly unique users have grown by more than
70% to 6.5 million, page views of FT.com have risen by
50%, the revenues have also grown by 40%, so you can see that
while the print operation is very important, and it is a mainstay
of the business and is very important for our revenues and audience,
the proportion of on-line is increasing, relatively speaking.
Q571 Baroness McIntosh of Hudnall:
I am trying to tie it a little bit to the question about the loss
of circulation in the UK on your print version. Do you flex the
on-line content significantly away from the news print content?
Mr Barber: If I may say, that is a very relevant
question. We took a decision in 1999 shortly after we launched
FT.com that we would build what I called at the time "an
integrated newsroom". By that I mean we would ask our journalists
to contribute material both to the newspaper and to the website.
That has not been the case. I was just talking to someone the
other night who works at The Washington Post, they
have a separate operation. It took quite a lot because we are
asking our journalists to be much more flexible, we are asking
our journalists not, for example, to stay on the phone for several
hours and then write intensely between 4 o'clock and 7 o'clock,
we are asking them to produce stories or analysis or commentary
at any time of day. It took some time for that to bed down. Last
year I took the next step, which was not just to ask the writing
reporting journalists to contribute content on-line but also to
work seamlessly in terms of production. The key point to understand
here is that we have something called "FT content,
news and views" and we offer it seamlessly throughout all
the different media, so that could be on a Blackberry, on FT.com
or in the newspaper. How you package that, when you decide what
to put out on FT.com, first is something we wrestle with
every day, but the principle is it is the same content, the same
journalists co-operating together on-line and in print.
Chairman: As we are on on-line,
we might stay on on-line for a bit. Lord Maxton?
Q572 Lord Maxton:
To some extent you have been answering the question. I would have
thought your newspaper perhaps more than any other was going to
be affected by the digital revolution in terms of the Internet
in that you are a business newspaper. Presumably people in the
past bought it for advice on what shares they were going to buy
that morning and that afternoon, now, of course, they no longer
are going to your written edition necessarily for that, you hope
they are going to go to your FT.com, would that be correct?
Mr Barber: Not entirely, Lord Maxton, I think
you will find that everybody has been affected by it.
Q573 Lord Maxton:
I accept that.
Mr Barber: If you look at the performance in
terms of the circulation of local newspapers, they are a lot worse
off than the Financial Times. We have found that we can
sell, as a proposition, both the on-line content and print edition
together, they are complementary. I do not think you can make
a simple calculation that you drop the newspaper and you only
look at FT.com. In some instances it is the case, but it
is not every case.
Q574 Lord Maxton:
In terms of share prices, presumably with FT.com you are
updating that on a—
Mr Barber: A regular basis, yes.
Q575 Lord Maxton:
Minute by minute or hour by hour or?
Mr Barber: On a regular basis.
Q576 Lord Maxton:
If there is a breaking news story for your journalists, are you
just simply putting that as a printed version on-line or are you
using video and other means as well?
Mr Barber: Absolutely, we are using every single
tool. I think there has been a change if you are talking about
what we like to call in the business "scoops". These
used to be guarded under perhaps lock and key, sometimes hidden
and not produced until after first edition. That is not the case
now, we tend to put it out on the Internet, brand it, if you like,
get it picked up by one of these aggregators, either on Google
or Drudge, and before you know where you are you have this FT
story which is going around the world. In that sense, we have
become less sensitive to time.
Q577 Lord Maxton:
I use Yahoo! as my front page. You are there, are you not?
Mr Barber: Yes.
Q578 Lord Maxton:
You make an effort to be there?
Mr Barber: We want to be there.
Q579 Baroness Thornton:
When you first went on-line did you charge a subscription?
Mr Barber: I was not in the country at the time.
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