The Guardian’s Australian operation isn’t commercially sustainable  — not yet. But with revenues apparently 300% up on expectations, it’s well on the way to it, managing director Ian McClelland tells Crikey.

It’s McClelland’s job to make sure Guardian Australia can sustain itself once the original investment by Wotif founder and philanthropist Graeme Wood runs out. And at least so far, it’s going well. Last week the local outpost of the increasingly international masthead announced it was setting up a Melbourne bureau, nine months after hanging a shingle in Sydney. This announcement comes far ahead of schedule — the team originally expected to expand to Melbourne in years, not months.

There are no other bureaus currently on the cards, but The Guardian is dreaming big. Edit0r-in-chief Kath Viner has built an Australia-wide network of journalists and contributors, and from a commercial perspective, it certainly helps to have people on the ground, McClelland says. “We want to cover Australia, commercially and editorially,” he said.

Guardian Australia’s entry was smoothed by Wood’s investment, said to be commercial as opposed to philanthropic. Viner has previously said the investment would last five years, after which Guardian Australia would have to support itself. McClelland won’t reveal any more. Asked if any more money came The Guardian‘s way after Wood ceased supporting The Global Mail, he says the two projects are entirely unrelated.

But he says Guardian Australia is far from solely reliant on Wood’s investment now. Unlike most of its Australian rivals, Guardian Australia, like its UK parent, does not have a paywall. It relies instead on three main revenue streams: traditional display advertising, brand partnerships and consumer revenues. The ad business existed before the Australian editorial team was launched; it’s been turbo-charged since. The ad market’s been flat (at best) for several years, but McClelland says his team has had no problem selling here.

“I’ve worked across the US and Europe, and been in Australia for a couple of years. I think the ad market is really robust here. I know in terms of total volume it’s been fairly flat during the global financial crisis, but I think there’s a real enthusiasm for The Guardian,” he said.

Brand partnerships — resulting in what’s commonly called branded content or content marketing — are another pillar. For example, a partnership with insurer NRMA has used The Guardian‘s data-journalism team to explore Australia through numbers. And consumer revenues — selling stuff directly to readers — are another focus.

The Guardian in general is a pretty diversified business,” McClelland said. “It does masterclasses, conferences, live events, a villa and cottage rental business, a large dating agency, as well as various e-commerce businesses.” The Australian edition has already hosted a few masterclasses and plans to do more. McClelland says he’ll introduce aspects of the UK business here “where we see an opportunity”.

Guardian Australia is not currently paying its own way. But the economies of scale available to it through its affiliation with its British parent are huge. MeClelland said: “We’re lucky to have the backing of a global media organisation that has a wealth of assets and a portfolio of other businesses. And we’re very fortunate to have the backing of The Guardian Media Group, and the Scott Trust.

“We’ve got an amazing brand built over 200 years, and great technology products being delivered by an amazing 250-strong team of designers and developers in the UK. And, of course, we get all the global journalism and content being produced by hundreds if not thousands of journalists all around the world. We may be a start-up, but we get all those assets for free. So I’m extremely optimistic.”

As well as building up the business, the focus for the next few months is culture. McClelland says there’s been great commercial interest in the arts and culture content The Guardian‘s journalists are producing. And there’s “a big commercial project” around culture launching soon.

“Ultimately though, we’re following editorial,” he said. “Where their focus is, we’ll go.”

Peter Fray

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