Last week The Guardian announced a major change in strategy in the wake of annual losses – in cash terms – of £33m. The Drum asked Enders Analysis for its take on the plan.
Chief Executive Andrew Miller told staff that if the company continued on its current financial trajectory it could run out of cash within three years.
Central to the new plan is a boost in digital revenues from around £47m this year to around £100m by 2016.
In addition the company's website is to launch a US office as it aims to take The Guardian brand global.
The business also aims to save £25m in costs, and in what many see as an acknowledgement that print may now be on the way out, made it clear that the business was putting digital first.
Enders Analysis is one of the UK's leading media research consultancies. The Drum asked its consultant Douglas McCabe – a former director of Fish4 – to give his take on the plans.
* What does The Guardian need to do to hit its online revenue targets?
Diversify. Multiple products rather than just one product. The Guardian needs to exploit its brand more effectively.
* Is its move into the US a good idea?
It is. It gives it scale with a relatively attractive audience. In terms of positioning, the Guardian is uniquely well placed to articulate a credible liberal voice for a large American audience that might not always want the words 'New York' in its news and commentary brand.
* Is running out of money a serious possibility?
The group does not want to find itself in a situation where it is forced to sell an asset. Minimising losses has to be the first priority.
* Has the company let cost get out of control?
In reality running a relatively small circulation newspaper alongside a massive, resource-hungry website is an extraordinarily difficult thing to do. The breadth and depth of the Guardian's ambitions may need to be clipped, to focus on where it adds demonstrable value for audiences (that is, consumers but also business and public sector partners).
* Will the print product survive?
Yes. Print will be attractive for a material proportion of Guardian readers for some time to come and print remains an attractive display and brand advertising medium.
* From what other websites might it draw inspiration?
Wonderful service-orientated sites including in their highly various ways some of GMG's own assets, such as AutoTrader, Paid Content and a few of Emap's sites.