Telegraph Media Group (TMG) has reported a 76% rise in its annual operating profit before exceptional items, buoyed by a £13.7m increase in its digital subscription revenues.
Total subscribers grew by 139,000 from 423,000 in December 2019 to 562,000 in December 2020, taking the publisher's digital revenues to £31.5m in 2020. Growth in subscribers has continued to date in 2021, TMG said, with the milestone of 600,000 subscribers surpassed in March.
Conditions were tougher for print operations, with a £30m turnover decline (£265.8m down to £235.2m) attributed to "the continued industry-wide structural decline in print advertising and newspaper circulation, together with the impact of Covid-19".
Despite those challenges, operating profit before exceptional items increased by £12.2m year on year to £28.3m in 2020, credited to "the growth in digital subscriptions and strong cost management".
‘Clear value’ of subscription strategy
A bullish Telegraph has seized on positive subscriber numbers in its financial results for 2020 to declare continued progress towards an ambitious goal of signing 10 million additional registered users and 1 million subscribers by 2023.
That goal looks achievable, with today’s figures indicating that in the year to December 2020 subscribers rose by 139,000 to 562,000, a 33% increase in percentage terms.
More positively for The Telegraph, this recent surge shows no sign of abating, with subscriber momentum thus far being maintained through 2021 to date, surpassing 600,000 subscribers in March 2021.
As an immediate consequence of this success, digital subscription revenue rose 77% to £31.5m in 2020, a jump of £13.7m.
The figures may raise some eyebrows among ad execs, however, skeptical of The Telegraph’s departure from the well-established ABC audit system for benchmarking circulation, but the numbers are independently assured by a PWC audit.
Another key metric of digital registrants is also heading in the right direction with 6.6 million having logged in as of December 2020, a significant increase from the 5.6 million total just 12 months before.
The average revenue per digital subscriber also rose, standing at £193.33 for December 2020 while operating profit before exceptional items rose by £12.2m to stand at £28.3m in 2020 (up from £16.1m the year prior).
Through 2020 digital subscriber growth was 79%, with overall subscription revenues of close to £98m.
TMG chief executive Nick Hugh said: “This demonstrates how our subscription strategy, which recognizes the quality and value of our journalism, is working. In 2021 we expect to further continue our strong year-on-year growth.”
TMG attributes its success to a ‘subscriber first’ strategy which prioritizes investment in journalism, technology platforms and digital operations.
As a result, online traffic among subscribers surged 57% last year, outpacing 12% growth from the non-subscribed.
The company said its robust performance allowed it to repay all furlough monies initially taken as part of the government’s Coronavirus Jobs Retention Scheme.
Sub focus as print proves challenging
Progress made in the digital realm offset challenges in the print business, reflected in turnover falling from £265.8m in 2019 to £235.2m in 2020.
The blame for this drop is laid squarely on the shoulders of a broader structural decline in print advertising and circulation which shows no sign of bottoming out – compounded by the ravages of Covid-19.
"Whilst understandably cautious given the challenging trading conditions, we remain confident in our strategy and currently anticipate that the underlying profitability will increase further in 2021, despite the significant deterioration in the advertising and commerce markets," TMG said.
Emphasis will therefore remain on ramping up subscriptions, with TMG expecting subscription revenues to account for around 50% of total revenues in 2021, up from 42% in 2020.
Recognizing that a changed external reality requires commensurate adaptation, media sales teams at The Washington Post, Reach and CNN recently told The Drum how they were forging paths through a jungle of uncertainty.