The Guardian has been the market leader for years, but it has still managed to reach a position where it is losing a million pounds a week. So how did this happen? The Innovation Media Group published an extract from its latest book, Innovations in News Media 2016 World Report, to explain the situation.
For decades, pursuing upmarket excellence meant settling for a small audience, but the Guardian has claimed success in this field. In March 2016 it had an average of 8,872,392 daily browsers; in March 2011, that figure was only 2,722,490, so its traffic had tripled in five years.
The contrast with print is stark. Five years ago, the Guardian’s circulation was 261,116, so for every print purchaser it had about ten online readers. But by March 2016, print sales had slumped to 161,152, a loss of almost 100,000 paying customers, or 38%, in five years.
In its online space, online advertising was first shredded by Google Ads, and now it is blitzed by ad-blockers. This situation can only replace a small part of the revenue lost by print display adverts.
With this new paradigm in place, The Guardian makes an eight-figure loss each year. However, they can afford to do so, since its owner, Scott Trust, provides most of the cash to maintain the newspaper.
The good news is that it still has £700m to play with, not to mention a great deal of talent. But how will they manage to keep afloat, while continuing to push the boundaries of journalism?
Innovation’s take on the case is as follows:
“It’s all too easy to bash The Guardian: right-wing pundits do it for fun, apparently unaware that if they sneer at a newspaper for losing money, they will have to applaud Richard Desmond’s Daily Express. It’s much harder to find answers to its problems, but here goes: (1) Build a graduated paywall, starting at £1 a week; (2) Merge membership with subscription; (3) Offer free subs to students, who are growing up without ever catching the print bug; (4) Do less. The Guardian publishes over 400 stories a day. It was never supposed to be a quantity paper.”
Read more details on the case study here.