The Times and Sunday Times went behind a paywall in June 2010 and the papers made a pre-tax loss that year of £45m. The Guardian and Observer lost £38.3m in the same year.
Since then the print circulation of The Times has dropped by 18.9 per cent from 503,642 to 408,643 and The Guardian has fallen by 42 per cent from 286,220 to 166,039.
If you take into account readers of the paid-for tablet edition of The Times, its circulation has fallen by 3.2 per cent to 487,697. The Guardian does not publish ABC figures for tablet subscribers.
The Guardian has quadrupled its online traffic from 1.9m browsers a day in June 2010 to 7.8m in the last set of ABCs. The non ABC audited Times and Sunday Times websites are likely to draw tiny audiences by comparison.
But five and a half years on The Times and Sunday Times are (I am reliably informed) in profit. Guardian News and Media is set to make its biggest ever loss for the year to the end of March, more than £50m on a reported basis – but £80m in terms of the amount of money that has been spent out of its savings.
Does this signal the failure of the open journalism model as practised by The Guardian? It does seem to suggest that it is impossible at this stage to support a staff of more than 900 journalists mainly on revenue from a free website.
The Guardian has hinted that its stance against paywalls may be softening. A spokesman said that in future the paid-for package could include some members-only content such as “additional reporting, further updates, deeper participation with our writers, as well as better functionality and live events”.
The curious thing about The Guardian’s financial meltdown is that for the year to March 2015 it reported underlying losses of £19.1m, which – with £838m in the bank – looked sustainable. Editor Alan Rusbridger and then chief executive Andrew Miller seemed to genuinely feel they were leaving the ship in good shape.
Since then the wheels seem to have come off.
All UK national newspaper print and online advertising has been under intense pressure since the summer.
It seems that The Guardian has felt that pain more intensely than others because it has pursued a strategy which has made it far more reliant on revenue from advertising than from its fast-diminishing newspaper sales revenue.
GNM has increased the number of “core editorial staff” by around 200 to 968 as of last year, swelled largely by investment in Australia and America.
Like a new media start-up, GNM appears to have focused on growing an audience first and hoping that revenue would naturally follow. Sadly, it looks like that strategy has run out of road.