Independent says 2021 revenues up 30% while operating profit doubles

Independent set to record best year since dropping print with profit up 100%

Zach Leonard on Independent revenues

The Independent has doubled its operating profit this year and grown revenues by a third, Press Gazette understands.

The Independent has been in profit every year since it closed its print edition in March 2016.

The continued growth appears to be both an individual success story and a reflection of a news industry that is emerging well from the Covid-19 pandemic, with Bloomberg chief executive Justin B Smith telling Press Gazette “the truth is, everyone’s doing well this year”.

The Independent’s official numbers are still being audited but Press Gazette understands it will be reporting operating profit growth of 100% between October 2020 and September 2021. This would take it from £2.7m last year to £5.4m.

Revenue growth of 30% year-on-year would mean a rise from £30.3m to £39.3m.

This shows an accelerated rate of growth since operating profits were up 18% and revenue growth up 14% the year before.

Chief executive Zach Leonard told Press Gazette: “I think in light of our ongoing investment package into the business that’s brilliant news as we continue to grow.”

Independent Digital News and Media’s audited results for 2020/21 will be published early next year.

Leonard said the publisher's strategy has stayed "very largely on track" over the past year despite an "unpredictable market", with "such significant overperformance under the conditions of Covid".

Press Gazette reported in February that The Independent was hoping to make its first acquisitions and kick off a strategy that would ultimately put the brand at the heart of a global media company.

Leonard told Press Gazette that "conversations continue" but the publisher is concentrating on strategic partnerships "that achieve the same goal".

"I think the realities of a still uncertain market relative to Covid et cetera is that our absolute driving goals are to continue revenue growth of extraordinary record levels, and profit growth with that, and so our appetite for acquisition or partnership is strong but it isn't our top priority relative to the continued value creation of the company now," he said.

But he added that as areas such as e-commerce and video sub-brand Independent TV continue to grow "those ambitions, I think, will grow even greater" and may come to something in the 2021/2022 new fiscal year.

A spokesperson for The Independent also told Press Gazette the brand has "ambitious plans" to expand this financial year.

As of September, it had 121 editorial staff in the UK and the spokesperson said it would "continue to invest in this UK based editorial staff during the next year as part of its commitment to providing high quality journalism".

In the US, the number of editorial staff will be doubled from 25 to 50 over the next year with supporting growth in the commercial team.

Leonard summarised The Independent's "incredibly clear" strategy as revolving around three themes: revenue diversification, converting users from anonymous to known (A2K), and international expansion.

'Unique relationship' with platforms

Around 60% of The Independent’s revenue is derived from advertising and 25% comes from content sales including digital subscriptions, licensing and syndication. The remaining 15% encompasses new product development and digital services, including ad sales, data and technology support for other publishers.

Advertising itself is diverse, Leonard said, with about six or seven different lines.

Branded content has grown, having split from sister title Evening Standard to create the separate Independent Ignite team led by Emma Elford, who led the Telegraph's creative commercial content unit Spark until its closure last year.

Asked why The Independent had expanded its division where others have moved away from branded content, Leonard said: "I'm very pro and always have been. I think it may possibly be a challenge for some brands to get their heads wrapped around it or others may be very purist and feel that it's just advertorial by another name.

"But I think it's critical for the continued provision for quality journalism that we're open to these things. Our terms and conditions always require that there's clear labelling..."

A major part of the focus on revenue diversification revolves around licensing and syndication, which includes content sales and relationships with the major tech platforms and longer-term partners like Yahoo and MSN.

Leonard said The Independent, which is on Google News Showcase, Facebook News and Apple News, is different to its competitors with a "quite unique relationship with the big platforms".

"We don't take a cynical or aggressive tone against them," he said. "We feel that there's a very important symbiotic relationship with Google and Facebook and Apple particularly."

But he added: "We don't shy away from the debate. We get in there and we argue our point, and I couldn't agree more that the value of our journalism is vital to uphold, but I just feel that you're better part of that in partnership rather than as adversaries."

Leonard said The Independent had "negotiated hard" to make sure the deals were consistent with the brand's values when it sells content to another third party and, although the "negotiating room is fairly narrow" they "feel like we got our fair share".

[Read more: Publishers break silence over secret deals behind $1bn Google News Showcase]

But the deals were "incredibly natural extensions" considering The Independent had already done a lot of work on Facebook Instant Articles and Google "from an ad serving and holistic relationship perspective".

On Facebook, The Independent had worried the separate Facebook News tab would have an adverse effect on the Instant Articles formatted posts found in the main news feed. But Leonard said: "We are watching that one closely and it doesn't seem to have had an adverse effect at this stage."

He also praised the added element on Google News Showcase which allows publishers to prompt readers to purchase subscriptions after they have read a certain number of articles for free. This element only went live for The Independent in September so Leonard was as yet unsure how successful this would be.

Registrations double in six months

Like many publishers, The Independent has increased its focus on encouraging readers to sign up with their email addresses, through offerings such as newsletters, events or campaigns, to improve its first-party database and help "preserve our future".

Registrations doubled between March and September and Leonard said a "very high target" has been set for the coming year as this becomes a "top priority". Leonard complimented "the great efforts" of Reach, which reached 6.7m registered users in July this year after 150% growth in a year.

Reader revenues through subscriptions, which give full ad-free access to the website, and donations grew by nearly 40% between October 2020 and September 2021, Leonard said - although they are still a single-digit total of all Independent revenues.

"We're rather small and modest in our subscriptions, but that's okay," he went on. "It's an important but not top priority area for us.

"We're much more interested in the broader engagement that comes with data acquisition, and growing registrations and engaging people to come back, whether they're here for the free relationship through advertising, funded by advertising, or getting involved in signing up for a newsletter or joining a petition."

[Read more: The Independent expands 'commitment to making change happen' with petitions platform and net zero target]

Engagement generally is the "holy grail", Leonard added, especially for boosting advertising revenues with more pages per visit.

US expansion

The Independent tells advertisers it is the biggest quality news provider in the UK, citing industry-recognised Ipsos Iris data for August that put it on a monthly audience of 18.9m, above The Guardian on 17.8m and The Telegraph on 14.3m. In the US the website had an audience of 20.1m in August, according to the closest comparable Comscore figures.

According to Similarweb figures The Independent ranks eighth for monthly visits in the UK (on 42.2m behind The Guardian's 110.3m in third place) but does not yet appear in the US top 50.

Focus on international growth has helped the Independent brand relative to UK national competitors, Leonard said, "to be more durable and to actually be able to continue to grow and invest our ambitions and to see the company grow continuously".

In the US, where Leonard said there is a demand for British journalism from users who first arrive through social media or another referral link and then begin to return directly, The Independent has been "climbing nicely and quickly".

The Independent has a challenge to show its uniqueness in the US, competing with national players and TV networks with huge digital offerings, but Leonard said one of its biggest strengths is its international affairs content, particularly in the Middle East and Western Europe.

"That's heavily consumed and a really big part of why people come to us in the US market," he said. "So the US is our most strategic and often can be our largest market on any given month."

The Independent can also exploit audience data and research to show its US audience is slightly younger than in the UK with a higher household income and higher education levels, Leonard said, adding: "That's like gold dust to a brand."

The Independent currently has about 25 editorial staff in the US and this is planned to grow by at least a third in the coming year.

Outside the US, the brand is also investing in a Pacific presence following a successful first year for its Asia edition, meaning this will grow to encompass the Asia Pacific with staff likely to be hired in Taiwan, Singapore and Sydney.

"We're trying to kind of circle the Pacific and complement that with the presence that we already are building in Los Angeles so that Asia Pacific element is a big investment for us," Leonard said.

An India team also started in the past year producing local news content and helping to maintain 24/7 coverage for the UK and US, which helps keep the site's Google rankings high, while a new site in Spanish seems to be "paying off". Leonard also teased the likelihood of hiring more correspondents for the North Africa region.

Other editions in Arabic, Turkish, Farsi and Urdu are owned and operated by Middle East publisher SRMG.

Independent TV

The ad-supported dedicated online video channel Independent TV launched in December 2020. Leonard said he took a similar view to TV as he does with social media: "If you're not there, you're missing a trick."

He said The Independent's early adoption of social media and digital-only move means it tends "to do better than our competitors as far as making sure that we're we're fit for purpose". Now, with 85% of the UK audience coming to Independent content on mobile, it is all about "portability and shareability".

Since the launch, Leonard said video revenues had grown by more than 130% year-on-year, adding this was "a really extraordinary outcome relative to a shift in strategy and emphasis and bringing in some brilliant talent to develop", while e-commerce revenues grew by 60%. US video activities are expected to begin "growing significantly".

Independent TV has dedicated producers mostly working on higher-production commissioned pieces, while the site's content desks also source and produce their own video content. Explainers summarising a news story do particularly well.

The first original series was TV format Binge or Bin, which attracted 5m views in its first ten episodes and was sponsored by Samsung for its second season in the autumn. The goal is for Independent TV to build a name producing and selling documentaries and winning awards.

The demand for video is not just a UK need, Leonard said: "In some markets mobile video could be 90% of way people consume Independent content." Video engagement at The Independent tripled as soon as Independent TV launched last December as people immediately watched more videos per session.

"We feel that it's not about trying to compete against the big TV news entities but to be present in a format that younger audiences really appreciate," he added.

"From a content strategy perspective, there's a whole different way of thinking when you produce video. So is it clear? Is it concise? Are the titles available so that if someone has audio off they can actually follow the gist of it?"

SIGN UP HERE FOR

FUTURE OF MEDIA

Press Gazette's must-read weekly newsletter featuring interviews, data, insight and investigations.

Comments

1 thought on “Independent set to record best year since dropping print with profit up 100%”

  1. So, Journalism is just as tool for trading in private data. Great. It has come to this. Ah well, if you can’t beat them (Google and Facebook), then join them.

Leave a Reply

Your email address will not be published. Required fields are marked *