Local news giant Gannett now reports having 1.63m digital-only subscribers, up 49% over the past year.
The publisher, which owns USA Today and hundreds of news brands across the US as well as Newsquest in the UK, expects to top 2m digital subs by the end of this year.
Reporting its fourth-quarter results, the company said its total revenues in 2021 were $3.2bn, down from $3.4bn in 2020. Digital revenues accounted for $1bn, or 32%, of the total.
Gannett has been building its US local news digital subscriptions business for several years. The publisher put its American national title, USA Today, behind a paywall last year. In the UK, Newsquest rolled out digital subscriptions for 70 of its largest sites in spring 2020.
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Gannett chief executive Mike Reed told investors in a call that the company sold more than 100 real estate properties in 2021 to repay company debt.
He also said the company had offloaded “70 very small, non-strategic properties across our newspaper portfolio – properties that either were not profitable or didn’t fit at all” within its digital strategy. Some of these sales have been reported on by Poynter.
“The sales… allowed us to exit markets with a low total digital addressable market and with an over-dependence on print.”
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Overall, these sales meant that the company lost around 27,000 digital subscriptions, said Reed, which meant Gannett just missed its target for the year.
“The disposals were 100% the right strategic move, but had we not done those, we would have ended the year with 1.66m paid digital subscribers. Our goal, previously stated, was 1.65m paid digital subscribers.”
The next goal, he said, would be to hit 2m to 2.2m paid digital subscribers by the end of 2022. The company expects to reach 6m by 2025.
In January, Gannett announced more than half its papers across the US would soon begin publishing digital-only Saturday offerings. Reed told investors on the call the change would take effect “in the majority of our markets late in the first quarter of 2022”.
The hope, Reed said, was to net more digital subscribers and expand the company’s value for advertisers.
“This commitment to our digital future was paired with the rollout of a universal e-edition, giving our home delivery subscribers access to the editions from over 200 publications across the network, including USA Today, with features such as audio capabilities, archive access, and ad-free access to our USA Today crossword puzzle.
[Read more: The New York Times is not the only publisher betting on games to solve subscription growth puzzle]
“We believe this move not only benefits our current subscribers and meets them on the platforms they are shifting to, but has the opportunity to expand our audience for advertisers through the scale of the additions.”
The company says it now plans to invest “$80m across content, marketing, data, product, and digital marketing solutions sales and support operations during 2022”.
Gannett was taken over by New Media Investment Group in August 2019 for $1.4bn (£1.1bn). The latter company folded its own newspaper business, GateHouse Media, into Gannett in November the same year. The New York Times reported at the time that as a result of the merger, one in five American dailies would share the same owner.
The company was pounded by the pandemic, losing 80% of its value between February and May of 2020. Flagship publication USA Today dropped 60% of its print sales in the six months to September 2020.
In common with other major news publishers, however, the business has since bounced back. Its market capitalisation is now approximately $750m, compared with less than $100m when it was in the depths of its misfortunes.
The company currently ranks fourth in Press Gazette’s 2021 “100k Club” list of English-language publishers with more than 100,000 subscribers.
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