Is scale in digital media enough to make a profit? Two of Britain’s major print groups that have relentless pursued scale across the globe through free websites are grappling with the complications of expansion, with this factoring into leadership announcements over the weekend. The two media groups are heading down different routes, but both are being driven by the remorseless pressures from digital changes and the collapse in print ad revenues.
Long-time editor and the driving force behind the expansion of the centre-left Guardian, Alan Rusbridger, decided late last week to quit the trust that owns the paper after other directors and his successor as editor raised questions about his continuing influence at the paper as it prepares to undergo a wrenching cost-cutting campaign. And DMGT, which owns the conservative Daily Mail, Sunday Mail and Mail Online, has found its new CEO from outside the clubby London print media world by selecting a digital “expert” and friend of the owner. New CEO Paul Zwillenberg was the head of Boston Consulting Group’s media practice and a former DMGT executive, having worked with or in the group for much of the past 20 years.
DMGT’s problem is this: its trashy Mail Online is the world’s most popular English-language news site, but it brings in only 10% (73 million pounds) of the company’s total revenues. According to the Daily Mail’s own report, Zwillenberg’s appointment comes as the company “needs to extract more revenues” from its millions of daily visitors.
At the Guardian, Rushbridger built the website into one of the world’s most popular, with expansions in the US and Australia. But it lost a stunning 58.6 million pounds in the year to March. The huge cash pile that financed expansion shrank by 100 million pounds to just under 740 million pounds. It could be gone by around 2024 at the current rate of spending. So management is cutting costs by 20%, and sacking 100 journalists.
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