The Independent is now one of the most profitable newspapers in the UK. It’s a significant achievement for a company that had to stop print and go digital-only in 2016, to survive.
Its revenue has almost doubled since then. Earlier this month, the publisher announced a 9% jump in annual turnover, and the third consecutive year of profits.
Few, if any, serious, quality newspapers in the world have successfully made the transformation from print to digital only. The Independent has been profitable since going all-digital, and nearly four years in it, continues to grow substantially on the top line.John Paton, Chairman of Independent Digital News
“More profitable than The Telegraph”
The latest figures shared by the publisher show that advertising revenues grew by 10%, lifting turnover to £27M, with profits of £2.3M. It is now more profitable than Telegraph Media Group, which made a pre-tax profit of £900,000 in 2018. The Guardian reported last year that it had returned to profitability after a period of losses, making an operating profit of £800,000.
The Independent now has a global audience of 95M unique browsers, that’s up 22% YoY. It has been UK’s largest quality digital news brand for a full quarter, according to Comscore. The title grew 16% YoY to reach 24.7M unique visitors in the UK this January.
In comparison, the Guardian had 24.1M unique visitors and The Telegraph, 19.7M. Compared to digital-only brands The Independent has more readers than Buzzfeed, HuffPost and Vice combined.
The publisher has also recorded strong growth in the US which is its largest market with 30M monthly unique visitors. There it has surpassed popular digital-only brands like Vice and Vox.
The results are stunning for a newspaper corporation that only a decade ago sold itself off for £1 plus a share of the next 10 months income, seen as the only alternative to going broke.Don Pittis, Business columnist at CBC News
Lion’s share of revenue from online advertising and licensing
Paton says advertising will account for around £22M of The Independent’s revenue this year. Licensing and syndication of content will contribute £6M and premium subscriptions, £2M.
The publisher has licensed content for Arabic, Persian, Turkish and Urdu versions of The Independent through a deal with the Saudi Research and Marketing Group, a Middle East publishing group. It is planning additional partnerships and translation services, including into Russian, reports the FT.
Its advertising revenue is a mix of bespoke advertising deals, programmatic ads served by networks, and affiliate marketing/eCommerce.
The title’s paid subscription option is called Independent Premium. It costs £3 for the first three months, and £8.99 per month, subsequently. Subscribers get ad-free reading experience and exclusive articles.
They include eight pieces of original content per day, including in-depth analysis and comment. Subscribers can also add a daily digital newspaper edition for a total of £12.99 per month, according to Press Gazette.
Non-paying readers can register with The Independent to receive one free premium article per week, comment on articles, receive personalized newsletters, and hear first about exclusive events.
“Turn off the massive costs of your printing press”
The group’s business model had defied some sceptics, according to Charlie Beckett, Professor of Media at the London School of Economics. “The digital advertising never replaces the old advertising. But the key difference you make, to make it profitable, is to turn off the massive costs of your printing press,” he told the FT.
Pittis comments, “as newspapers look for new ways of saving money, evidence from Britain and Canada may point to the next stage in the evolution of broadsheet papers to complete their transformation — the elimination of paper altogether, but with no paywall.”
“Early suggestions that online news had to be free were replaced by paywalls, which seemed to work for specialty papers like the Wall Street Journal or the New York Times, with the stature to attract online subscriptions,” he adds.
“The Guardian in the United Kingdom decided to offer their product free, depending on online ads aimed at their large readership, while begging loyal readers for donations. But none of those three have given up their print editions.”
Pittis points towards The Independent and the Canadian newspaper La Presse as having implemented such a model with varying degrees of success.
He also gives examples of online-only publications such as The Athletic or Business Insider that have entered the market, offering specialty service for a price, while avoiding printing costs.”
The model works in small markets as well, according to Jeff Elgie, CEO of Village Media, based in Sault Ste Marie, Ontario.
The publisher has editions in 12 Ontario communities as well as affiliates outside the province. It is profitable and earns 70% of its revenue from local advertising and 15 to 20% from Google-style ads.
The rest comes from local contributions and licensing of their publishing technology to other papers. Elgie told CBC News that the company uses its reach to attract advertisers.
“Get as smart as them at monetizing content on the web”
These publishers exemplify that there is space for them to thrive in the online space dominated by Google and Facebook.
Paton told Press Gazette, “While there’s legitimate concerns about the amount of advertising that’s going into a very small group of organizations around the world, one of the things the Independent team has done is work out how we get as smart as them at monetizing content on the web.
“They work really well with those platforms. They understand them well. They meet constantly with their counterparts on those platforms and they are ready to maximise any change for the benefit of The Independent.”
“Relentless focus on investing in growth areas”
The Independent’s CEO, Zach Leonard adds, “Two keys to our success are a relentless focus on investing in growth areas, and support of a diverse range of revenue streams across advertising, licensing and syndication, and readers.
“This has served us, our advertisers and growing international digital audiences well over the last ten years.”
The Independent boosted spending on its editorial team by 12% in its 2018-19 financial year. It now has more than 100 journalists in 13 cities around the world, including Syria and Beirut.
According to Paton, the £2.3M profit for the year to September 2019 “could easily be double, but we’ve been investing—mostly in journalism, technology and marketing—since then.” The publisher is also making significant investments in growing its US operation.
I’m the happy warrior. I realise it’s a battle every day but I think the combination of investing in quality journalism, investing in technology, investing in the training to join up both those things for the benefit of monetizing that quality content – they are worth the effort.John Paton, Chairman of Independent Digital News
“Successful route to pursue for quality news organizations”
“We now have 12 years of the hard learnings from that big downturn that started in 2008. We’ve seen the ups and downs of social media and the large platforms. The smart outfits have learned how to use that system,” he says. “Some companies have got to the point where they have invested so little they are struggling to make that transition.”
Paton is particularly enthusiastic about the revenue potential of affiliate marketing/eCommerce. The Independent carries editorial reviews and recommendations with direct links to vendors in its Indy Best section and gets a cut in every purchase made.
He believes that a strategy of global expansion combined with use of reader data to fuel eCommerce is what will take The Independent’s revenue to £100M in four years. “I still believe that scale within context and scale with data is a successful route to pursue for quality news organizations,” he says.
Calling it the “A2K” strategy (anonymous to known), he explains, “That’s to capture third party data through emails allowing you to enter e-com and affiliate marketing budgets that dwarf advertising budgets worldwide.”