Chief Executive of the Guardian Media Group, Andrew Miller CA has outlined to members at an ICAS event how his company must change to be sustainable in the digital disruption of the news industry.
Speaking at the ‘Future of Digital Media’ event, held in
conjunction with Guardian Media Network, Miller said that print accounted for
70 per cent of the Guardian’s revenues, and that the yield on digital was still
“way, way lower than newspaper”.
“Digital is fantastic, [with] fantastic opportunities, but
only 30 per cent of our revenues come from digital format,” he said.
“So, to say we can sustain a business for a long time with a
high level of journalists with this mix of revenue is very, very difficult.”
Miller stressed the importance of GMG’s assets other than
the newspaper in ensuring its survival. “Critically, our way of surviving is
[that] we’ve assets outside of the Guardian,” Miller said.
“We have a loss-making core newspaper, but it’s subsidised
by other assets we can draw on when we need to.”
He said that GMG was dealing with the financial challenges
facing the Guardian by “understanding our brand, understanding our audience;
we’re segmenting people who read the Guardian […] and try and work
understanding the audience more clearly to make more money from that audience.”
“There’s a positive side, which is trying monetise the
audience,” Miller said. “The other side is trying to optimise the economics of
He said this latter element involved “format changes, and
price rises, continuing pressure on the cost base.”
Miller said investment was also a part of the company’s
strategy. “It’s a tricky balance of trying to find the right levels of costs,
to continue to invest in new products and innovation as well.”
“Journalism is very under threat at the moment with the
digital transition,” He said.
He described how the Guardian’s approach to news-gathering
and ‘ownership’ of expertise had changed.
“It’s a completely different place we’re in now,” Miller
said. “News organisations ‘owning’ news just is no longer a sustainable
He said the Guardian was trying to encourage what he called
open journalism. This was a means of finding a way to survival in digital
format, he said.
“[The Guardian’s] approach about serious journalism; it has
to cover more than just a paper, it’s about other social media as well,” he
The story of the death of Ian Tomlinson, the newspaper
seller who died following an incident during the G20 protests in 2009 was “open
journalism at its best”, Miller said, where the Guardian used social media to
pick up, using photos and videos, to try and then determine what had happened.
Miller mentioned the Guardian’s open API (application
programming interface) as an important element of its open journalism, as it
means “people can extract the data from our website and play with it and use
He said that approximately three million people engaged with
the Guardian website every day. “It’s huge,” he said. Sixty per cent of this
figure comes outside the UK.
The Guardian’s head of Media and Technology, Dan Sabbagh
told the event that the challenge to be faced was “to be competitive and
relevant in ecology where everybody can be incredibly creative. And it’s very
Speaking about the changes brought about digital for
journalists, Sabbagh said that nowadays he could see “so many different ways to
communicate”, whereas in the past, five to ten years ago, a journalist “would
communicate to your readers of [your] paper, and you would be dead to the rest
of the world. And that was how newspapers worked.”
“Everyone in media just wants to reach people,” Sabbagh
said. He called what was happening “tremendously exciting and tremendously
However, he said that what had accompanied the positive
creative change “is the utter sense of existential financial despair, which is
killing us all. And what you’ve also seen over the past five to eight years is
a complete loss of confidence in media generally, in the financial respect.”
Sabbagh hailed that the Guardian’s being owned by the Scott
Trust, and said it was “a precious thing” that no rich man told it what to do.
He said that in most cases, ownership of newspapers has
drifted to what he called a poor football model, where you get “lively
characters” who “will fund these businesses over the long haul, and that’s to
be blessed in one sense, but it also carries with it a certain burden.”
“We just have a real disconnect,” Sabbagh said of the
current media environment, “because creatively it’s brilliantly exciting, I
must say. And the opportunities are right there, and the arrival of 4g is, I’m
absolutely sure, going to be transformative.”
But, he said, “what we’re really struggling with, I think,
is sort of business models struggling to keep up.”
He said “we need to marry, I think, our financial commitment
to media to our creative commitment.”
Summing up his attitude to the creative potential and
financial challenges of journalism’s current state, Sabbagh said: “I come to
you both in excitement and in despair.”
See pictures from the event.