The Guardian has announced that they have reached break even point. This is a big story as it demonstrates that a thoughtfully developed and carefully executed plan can make a digital news platform operationally and financially viable.
As a subscriber to The Guardian and as on who appreciated their genuine independence, I am pleased to read of their success.
Today, we have announced that the Guardian has successfully completed its three-year turnaround strategy — we have hit our goal of breaking even, and made a small operating profit on our path to sustainability. This means that the money we make from advertisers combined with what we receive in the generous support from you, our readers, has this year covered the cost of producing the journalism that informs and inspires millions of people around the world. Our unique ownership model means we are not controlled by a billionaire owner, or a group of shareholders demanding financial returns — any profits made, and all financial contributions from readers, are reinvested directly into our journalism.
Further in the article by Guardian editor-in-chief Katherine Viner, there is a reflection that I think speaks to similar challenges faced by newsagents, challenges faced by the channel today.
Three years ago we faced a very different situation, when a broken business model for news was threatening to destroy media organisations around the world: print advertising was collapsing, newspaper sales were declining, and the promise of digital advertising growth was going almost entirely to Google and Facebook. These threats still exist, and while we’ve found a way to counter them, the situation remains fragile.
I see this story as offering hope and inspiration for newsagents as we transition our businesses, seeking new shopper traffic, higher margin dollar transactions and greater relevance to shoppers.
All in our channel need to work on:
- Attracting new shoppers.
- Driving up margin dollars earned per transaction.
- Bringing shoppers back more consistently.
- Managing our businesses for profit.
- Making our businesses appealing to everyone who walks past, walks inside, reads abut us, checks us out on social media.
- Changing shopper perception.
This means ranging new products, recasting the shop floor, breaking our current model. While this sounds dramatic, it is what is necessary. Historically, we have relied on consistent traffic from agency and low margin lines with the argument that high traffic makes low margin viable. That argument fails in 2019 with falling traffic from every traditional agency line product. While there are some exceptions, the channel as a whole is not experiencing such exceptions.
The future can be bright is we break our own model and recast our businesses.