Guardian Media Group booms in a clickbait downcycle

Guardian Media Group (GMG)’s record revenues in the past financial year have provided yet another vindication for the subscription-based news model.

The parent company of the Guardian and Observer newspapers hit revenues of £264.4mln, a 3% year-on-year increase.

This was, however, offset by £21mln in cash outflows due to planned investment in journalists and digital media infrastructure.

As the company expanded its workforce globally, expenditure on wages increased from £131mln to £152.6mln.

Income from digital products proved the special sauce for GMG’s record year, with subscriptions accounting for 70% of total revenues.

“In a difficult economic climate we have continued to invest in quality journalism and in our digital business capabilities to advance this strategy which has brought revenue growth and a continued rise in digital reader revenues from across the globe,” said chief executive Anna Bateson.

She added: “Despite challenges across the global media industry we will continue to invest and build a platform for long-term success.”

Though The Guardian is free to read online, readers may choose to pay a monthly or annual subscription to “fund independent journalism”, as the group puts it. Subscribers are also privy to added features such as newsletters and ad-free reading.

In a similar vein, The Telegraph Media Group (TMG) yesterday penned strong underlying earnings and operating profits, due primarily to its own subscription-based model.

Subscriber revenues for the proprietor of The Daily and Sunday Telegraph have increased 30% since launching its subscription-first revenue model in 2018, and currently constitute 51% of the total revenue mix.

On the other hand, group revenues for Reach plc, the Daily Mirror, Express and Star publisher, fell 6.1% in the first half of 2023, while operating profits fell 68% to £11.1mln.

Unlike GMG and TMG, Reach’s suite of titles operates on an advertising-based revenue model.

This feeds into a wider trend of declining ad revenues in the media industry.

Native advertising company Dianomi PLC (LON:DNM), which operates primarily in finance and business news markets, has been hit by the native advertising downturn, with revenues flatlining and AIM-listed shares tanking.

If anything, the promising results from GMG and TMG show that in a clickbait downcycle, subscription-based news wins out.