In two years, the U.K. newspaper, The Telegraph, has hit 400,000 paying subscribers and 5 million registered users after switching to a premium paywall and registered-access model.
Fifty-four percent of the company’s revenue comes from readers. However, although the Telegraph is transitioning towards becoming more reader-friendly, revenue fell by 2.6 percent to £278 million last year, while pre-tax profits fell by 88 percent.
In an interview with DigiDay, Nick Hugh, CEO Telegraph was still optimistic about the future. The publisher’s next goal is of reaching 10 million registered users and 1 million paying digital and print subscribers by 2023.
Q) What are you pleased with from these latest numbers?
A) I look at it as very strong progress. I’m well aware of the way some of the numbers are reported, but the fact we have an operating profit of £8.1 million ($10.36 million) implies a much stronger underlying base. The point is we remain profitable while transforming the business. That makes us unique. I’m comfortable with that and confident we’ll drive more profit in 2019 and 2020. If you have revenue down 2.6% and profit down double-digits it’s because there are costs involved. We’re focused on hiring journalists and investing in subscription capabilities and technology. It is an investment.
Q) You also went public with your average revenue-per-user figure of £200 ($256).
A) The purpose of every news organization is to have a sustainable business model for quality journalism. Subscriptions and ARPU are two parts of the same outcome. Being high on volume, but low on ARPU is irrelevant. If you take 400,000 subscribers on £200 ($256) ARPU, project that forward for 1 million subscribers, that defines sustainability. I will never play the volume game in subscriptions.
Q) Can you share your retention rate?
A) Our subscription run-rate doubled between 2018 and 2019. I’ll be even bolder in my assertions: We’ll acquire another 100,000 in net new subscribers next year, that’s after churn.
Q) Where will you acquire those from?
A) We have a base of 5 million registrants. Subscriptions are less about anonymous viewers, but we do still need them [anonymous viewers] to keep in the funnel to serve registrants and subscribers. The second pool is, we have 750,000 people who paid for our journalism in the last 12 months. They paid for our journalism but are not registered, whether they buy the newspaper or access on a day pass, there are other mechanics in paying and these people are warm to the Telegraph.
Q) How do you prioritize the subscription business without letting go of the ads business?
A) All our businesses in a subscriptions-led business have to evolve. One of the benefits of registration strategy is for a large group of readers, 5 million, we have a lot of identifiable insights. The partnerships’ business continues to be strong. In digital, there’s more money moving into the open marketplace. We’re comfortable with our market position. My future growth ambitions are on the subscription side, and I will always prioritize subscriptions over the casual reader, physically and digitally. On the ads side of the business, we try to sell the benefits of subscriptions and registration as part of the strategy, and that is landing very well.
