The Independent has revealed it has surpassed five million registered users and that advertising no longer makes up the majority of revenue, meeting two of its longstanding targets.
The milestones came as Independent Digital News and Media revealed record revenue growth in the year to 30 September 2022 taking it up 12% to £46.3m. The figures were shared with Press Gazette ahead of the release of the official limited company accounts.
The Indy said that non-advertising revenue – in which it includes content licensing, syndication and e-commerce – made up 57% of the total revenue taking advertising below 50% for the first time. Advertising was about 60% of the total a year earlier.
Independent Digital News and Media chairman John Paton told Press Gazette he was “very pleased with the team’s remarkable accomplishment here”. He highlighted that on Wednesday the team won an award for best diversification of commercial strategy at the AOP Digital Publishing Awards (the same category in which Press Gazette was a runner-up).
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Operating profit was down 65% to £1.9m, but The Independent continues its streak of being in profit every year since going digital-only in 2016.
Paton told Press Gazette the profit decline was due to investment in e-commerce, Independent TV, reader revenues and international expansion, as well as reporting from Ukraine.
Paton said: "We're not afraid to take down profit to invest in the future, which we've done from year to year. We're not afraid to say 'you know what, we're going to have to cut costs over here' as difficult as it might be, and then redeploy them and invest in areas that we think are growing."
In November a number of journalists lost their jobs as the company put 52 roles, of which 30 were in editorial, at risk of redundancy amid pressure on digital advertising.
"The Indy has got a long record starting in 2016 of doing the right thing, no matter how hard it is, like going all digital and dropping print," Paton said.
He added: "We've never been afraid here to stop investing in what's not growing as fast as we want it to and reallocate those resources to what is growing, and that's what we did here." He noted that new editor Geordie Greig has been expanding the team since his appointment in January, creating an "energised newsroom".
Greig's appointments have included former Independent on Sunday editor Tristan Davies, who later reported to Greig as co-deputy editor at the Mail on Sunday, as editorial director, as well as Chloe Hubbard as deputy editor.
Of Greig's arrival, Paton said: "He's a dynamic leader. He's in very early, he stays very late. He's always on - I can tell you because my Whatsapps are filled with Geordie on the weekends too.
"So this is a guy that really has brought a tonne of energy, a tonne of professionalism and experience to take us to that respected global title that we want to be. It's really exciting to see what's happening. It's very energising. This is not a down place, it's sort of an up place."
The Independent's revenue growth
The Independent said its revenue growth came from:
- Solutions/branded content business Independent Ignite - up 127% year-on-year
- Independent TV - up 52% year-on-year after launching in late 2020
- E-commerce including Indy Best - up by 44%
- Licensing and syndication (with Independent content sold to the likes of Bloomberg and Yahoo) - up 17%
A third (32%) of The Independent's total revenues are part of its "paid content strategy" as Paton explained it - encompassing licensing, syndication and more direct reader revenues.
Subscription reader revenues make up about £2m, or 4%, of total revenues but Paton said the "next big push" will be to grow in this area after "build[ing] out all the other pieces" and getting free registered users up to five million.
This is why The Independent has hired Gordon Thomson, who led DMGT's subscriptions brand Mail+ as editor for three years, as premium editor to head up the drive for paid subscriptions.
"One hundred million uniques drive volume, but we want to get to know these guys personally," Paton said, adding that there had been a 57% increase in the past 12 months to reach that five million registered user mark in recent weeks.
He predicted that The Independent could reach a target of ten million registered users within 18 to 24 months.
Paton compared The Independent's five million registered users to the 12.7 million at Reach across all the bigger publisher's national and regional brands. "I'm pretty impressed with that... we've done this with one product."
Meanwhile Independent TV does not simply "repurpose video", Paton said, but instead creates "award-winning documentaries" such as international correspondent Bel Trew's The Body in the Woods from Ukraine.
"We're doing things at a level that people did not expect us to do and we're getting the readers' trust in return for doing that," he said. "So there's much more of that on the horizon."
Independent managing director and former editor Christian Broughton has just been appointed to the board following his focus on the e-commerce and Independent TV strategies. Paton said this showed "how important we think that diversification of revenue and product truly is".
The Independent sizes up Mail Online in US
Some 37% of The Independent's revenues now come from outside the UK as did more than 52% of monthly visitors - with the US a particular area of investment.
Paton said The Independent employs about 300 people overall and around 60 of them are now in the US. There has been a 50% increase in editorial in the past year to around 45 people in New York, Washington DC and LA, with a further boost in commercial.
Chief executive Zach Leonard has been "spending weeks" in the US and will "spend more time there - because our ambitions are global," Paton said.
Leonard said in a statement he looks forward to "leading our US investments as we deliver Independent journalism across the world’s most commercially competitive media market".
Paton said The Independent fits into the US because "people there value independence". Setting a lofty goal, Paton said "for fun it would be great to overtake the Daily Mail in the US" and that this was "within our grasp".
"It's good to have a competitive goal just to motivate your team... and the Mail Online is a great product, obviously."
The Independent currently has a monthly audience of 21 million people in the UK - where it is now in a regular tussle with The Guardian for the fifth biggest news website - according to Ipsos iris data. In the US, The Independent had 25 million visits in April according to Similarweb data, compared to 113.6 million visits at Mail Online and 73.9 million for The Guardian.
Strategic partnerships with Facebook and news aggregator partners Yahoo and MSN "remain crucial" for growing The Independent's US reach, the title said in a statement. Paton said The Independent understands that many people come to news websites via social media now, but that the registered users strategy and other reader revenue means they are not "beholden to social media or the weapons of programmatic advertising".
The four eras of The Independent according to John Paton
Paton categorised The Independent's journey as going through three eras - and now entering its fourth.
It started with the "glorious" print era "that didn't make any money".
The second era, he said, was between 2016 and 2018 after the title closed in print. "They're very small, but they make a profit right away," he said.
The third era began when Paton and Leonard "teamed up" to lead the company in 2019. "We grew the company dramatically in size," he said.
Between 2019 and 2022 revenue grew by 80% which Paton described as "phenomenal". "That's during Covid, it's during lockdown, it's during all of those things." Editorial budget doubled in the same period, he added.
During that period, diversification was doubled down on with the launch of Independent TV and the Spanish-language edition as well as expansion in the US and Asia.
Era four, which The Independent is in now, Paton said, means a "continuation of that diversification, but now we have that wonderful opportunity with AI".
The Independent already uses AI, in particular machine learning tools, but it has the potential to deploy generative AI in certain ways to help its journalists focus on original reporting, Paton said.
The Independent has recently formed an AI team led by chief technology officer Chris Corderoy and Paton said they are "toying with things like creating our own large language model so that we can create our own version of generative AI and that's important because AI is going to let us enhance our journalism.
"We don't see it as others may do in replacing journalism. That's not our play. We see it as enhancing it."
If this can help create efficiencies, he said, they can "redeploy the vast majority of those savings into creating ever more valuable journalism, so that we can grow the company".
Paton added that he could "easily imagine" that in five years' time the "vast majority" of The Independent's content is consumed via video - and that AI can help with that in many ways, such as by creating simple video explainers.
"I think this next year is just going to be wonderful," he said.
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