The Independent is minimising its reliance upon advertising as it hits a significant number of registered users. It aims to multiply its direct reader revenue by five within two to three years.
The Independent – the digital-only newspaper that discontinued its print edition six years ago – has just hit the significant milestone of signing up 5 million registered readers. For its chair John Paton, that figure is testament to the work The Independent has invested in ensuring it is ready to ride the waves of AI, video, and ecommerce.
The paper has announced an operating profit of £1.9m off the back of £46.3m revenue – a 12% increase in revenue year-on-year (YOY). Of that, non-advertising revenue represented 57% of the total. Around £2m of that is from direct reader revenue. It is evidence of the title’s ongoing strategy to reduce the proportion of its revenue that comes from advertising, which has proven to be less secure than expected over the past year for publishers and platforms alike. For The Independent specifically, a slowing ad market was cited as the reason behind it cutting roughly a fifth of its staff in November last year.
Paton explains: “The Independent has had three eras. The first era is print, that was challenging for the company, many millions of losses. The second is] they go into all digital. They’re small and growing, but they’re profitable. And then you go into my era, which is one about growth. And so, for us, growth was about diversifying revenue in a number of ways away from advertising”.
To do so it has spent years investing in teams based around a number of key verticals. The first – and most visible – is Independent TV. Over the past year the digital video channel has increased revenue by 52% as its CTV presence continues to expand, and the company has announced it has reached 73 million viewers and accounts for roughly 10% of overall advertising revenue.
Recognition and trust
Paton says that the expansion has been driven in part by the recognition that audiences want both video and trusted news. That trust, he says, is the basis of both the existing success at IndependentTV and future reader revenue strategies: “What I take from that is a massive audience want to see videos. So IndyTV is born out of a want to do quality journalism [around] what we stand for, our principles of climate change sustainability…So in that case, you want the very best journalism to reach the biggest audiences that really like video”.
That trust in the brand is particularly strong in the US, where Paton says it ranks alongside only the BBC, New York Times and Washington Post in terms of trust and credibility among audiences.
That has also been the ethos behind the expansion of the team’s ecommerce capabilities. Over the past year the IndyBest platform has signed up an increasing number of commercial partnerships and delivered a 44% increase in revenue. That would not have been possible, says Paton, were it not for the work the team has put in to building up brand trust over the course of the platform’s 25 year-long history.
He says: “Travel is another [area in which The Independent has strong credibility] so we started to focus more heavily on those areas where we have an audience but, more importantly, we have their trust. We invest in things that enhance the brand starting with the journalism and you start investing in the platforms themselves”. He specifically cites its travel editor Simon Calder as having the credibility around which a strong ecommerce offering can be grown.
Paton states that the next generation of media will be as powered by AI as the previous has been by digital and social. He says that The Independent is building out its own large language model – the better to help with the rote aspects of journalism – but has no plans to remove any resources from the teams and individuals that create its articles, videos and other forms of journalism. He says that, while companies that don’t have sound business models use AI as a sticking plaster to hide weaknesses, those with considered approaches can use it to boost existing strengths.
Looking forward, Paton says that The Independent is building upon both trust and the 5m registered readers for a reader revenue push. He says that while it is currently a small proportion of the 32% of overall non-advertising revenue, it is “now going to be a fast growing part of that based on the back of the fact we’ve got these registered users who want to talk to us, and our marketing towards that as well. Then you start to pitch for even greater pitch for reader revenue and lead to revenue about 2 million with us. That’s going to be a big number like 10 million in two [or] three years.”
Between investments in AI, video and ecommerce, The Independent isn’t doing anything that other publications are not. However, its agility and willingness to invest (and cut) where necessary means that it is well-placed to take advantage of the prevailing winds as and when they arise.
Republished with kind permission of Media Voices, a weekly look at all the news and views from across the media world.