The Guardian is preparing to launch an e-commerce platform as it continues to look for new areas of revenue diversification.
Chief financial and operating officer Keith Underwood has revealed The Guardian will begin making product recommendations “based on the trust that we’ve got within the brand” with the aim of making revenue through affiliate links.
Speaking on a panel at the FT Strategies News in the Digital Age conference in London on Tuesday, Underwood also revealed The Guardian has added 50 journalistic roles in the US over the past year or so.
Despite this The Guardian has just completed a round of cost-cutting that saw about 30 journalists take voluntary redundancy.
FT Strategies: ‘In general news, you’re not making money out of your core product’
On the same panel, which was called “Diversifying revenue for long-term success”, FT Strategies principal Jim Egan said of the current market: “If you’re in general news, you’re probably not making money anymore from your core product. The sector is at the point of marginal, if not negative, profitability generally.
“But that doesn’t mean your news business, your news organisation, should be losing money. It just means you need to look for different ways to generate profit in other areas in order to provide the lifeline for your newsroom and so on and so forth.”
However Underwood later said: “For us, within our industry, there is still, I think, a huge amount of value to be had in our core markets, basically getting it right, making sure the proposition is absolutely as good as it can be, and making sure the infrastructure supporting that product is as strong as it can be.
“The diversification opportunities that have been successful for a lot of publishers have been really only into adjacent markets, but executed in a really strong way so different formats… events, TV shows, podcasts, newsletters, et cetera. And you can find that those real moonshot types of diversification plays can take a lot of energy away from business and distract you from really making sure that the core product is there.”
But Underwood also said that “with the core revenue streams under structural pressure you’ve got to diversify – you’ve got to look at digital transformation and new opportunities, new formats to try and drive new engagement with audiences, and different revenues, different partnerships coming in”.
Paid-for app Feast launched
For example he cited the launch of The Guardian’s new paid-for recipe app Feast, which costs £2.99 a month in the UK and secured a major six-month partnership with Tesco Finest which will also take in the publisher’s other food content.
Underwood said that as a result of The Guardian’s efforts and its early online business it now has average monthly page views of about 1.3 billion and is “more digital, certainly, more global, more reader-funded than ever before”.
In addition, he continued, 70% of The Guardian’s revenues are digital, more than 35% of its total revenues come from outside the UK and 50% of its digital revenues are non-UK.
Becoming “way more reader-funded versus ad-funded than we were before” has given The Guardian “real resilience in our model to try and test new things”, Underwood added. He also described international diversification away from the UK as a “game-changer” for the same reason.
Underwood said voluntary digital reader revenue is now at around £80m and approaching being a £100m revenue stream for The Guardian, which is a £260m business overall.
He added that The Guardian is “absolutely committed to open journalism on the web” despite introducing metered access to its app.
The latest financial results for Guardian Media Group are expected to be published this month. In February, the publisher told staff that in the first nine months of the financial year there had been a £17m revenue shortfall compared to expectations, largely because of an advertising downturn and cash outflow of £39 million.
Correction: This story originally stated that The Guardian receives average monthly page views of about 4.3 billion. In fact Keith Underwood said 1.3 billion.
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