Speaking at the Guardian Media Network's Future of Digital Media event, held in conjunction with the Institute of Chartered Accountants of Scotland (ICAS), GMG chief executive Andrew Miller advised that GMG’s assets outwith the Guardian newspaper were ‘critical’ for the company’s survival.
“We have a loss-making core newspaper, but it's subsidised by other assets we can draw on when we need to,” commented Miller.
He added that “working on understanding the audience more clearly [in order to] make more money from that audience” was crucial for GMG to deal with the financial challenges it is currently facing. The latest financial figures revealed that the Guardian newspaper had lost over £44m last year and as a result of such losses £7m is to be cut from its journalism wage bill.
According to Miller print still accounts for 70 per cent of the Guardian’s revenues and despite advancements in digital its return is still “way, way lower than newspaper.”
He continued: “Digital is fantastic, [with] fantastic opportunities, but only 30 per cent of our revenues come from digital format. 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.”
He went on to discuss how digital is changing the face of journalism, commenting: "Journalism is very under threat at the moment with the digital transition.
“It's a completely different place we're in now. News organisations 'owning' news just is no longer a sustainable business model,” adding that the Guardian was now trying to encourage “open journalism” where people can “extract the data from our website and play with it and use it.”
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 from outside the UK.
Also speaking at the event, the Guardian’s head of media and technology, Dan Sabbagh, described the changes within the industry as “tremendously exciting and tremendously creative.”
However, he said that what had accompanied the positive creative change was “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.”
Speaking of the current media landscape Sabbagh added: “We just have a real disconnect because creatively it's brilliantly exciting, [but] what we're really struggling with, I think, is business models struggling to keep up. We need to marry our financial commitment to media to our creative commitment.”