Telegraph boss Nick Hugh: 'We are still the number one selling quality newspaper'

Covering the most powerful media companies to the smartest startups, former Independent media editor Ian Burrell examines the fraught problem of how news is funded today. Follow Ian @iburrell.

Defiant Telegraph boss Nick Hugh predicts 3 million registered users by the end of year as he makes historic decision to scrap bulk sales of the broadsheet – allowing the Times to overhaul it in overall circulation.

A quarter of a century ago Rupert Murdoch shocked his UK news publishing rivals by slashing the price of the Times to 30p and initiating a brutal price war.

Murdoch’s intention was to fatally wound the newly-launched Independent and to undercut the lead title in the sector, the Daily Telegraph. It was 1993 and the damage caused by this instant devaluation of British broadsheet journalism on the eve of the internet revolution and the onset of free online news is impossible to gauge.

But for the past generation the two great upmarket titles of the political right, the Times and the Telegraph, have continued in an unforgiving struggle, their eyes bulging and their hands at each other’s throats.

Now, in what some might regard as a significant moment, the Times moves ahead of the Telegraph in terms of headline print circulation, which back in 1993 was the key metric for success in Fleet Street.

But in an interview with The Drum, Nick Hugh, the new chief executive of Telegraph Media Group, argued that the Times’s ascendant position is a pyrrhic one, achieved only by its continued and costly practice of distributing around 100,000 copies for free, while The Telegraph has now abandoned these “bulk” sales altogether (it previously gave away 67,000) . It means The Times “headline” sale of 446,204 is greater than The Telegraph’s 393,310.

But in terms of actively-purchased “news trade” copies the Telegraph stands highest on the podium, with 384,407 compared to the Times’s 344,937, a lead of nearly 40,000. “I don’t assign a value to headline, the value is at news trade and we continue to be very proud of our leading position,” says Hugh defiantly. “We are still the number one selling quality newspaper.”

'Registrations First' strategy

Just seven months into the top job at this 163-year-old British media institution, Hugh is insistent that this most traditional of news brands is not retrenching but is in a growth phase as it focuses on building closer and more lucrative relationships with readers both in print and on digital platforms.

The Telegraph has dubbed its strategy “Registrations First” and Hugh has set a target of 10 million registered users. He claims the company is on course to reach 3 million by the end of this year and has grown its rate of registrations by 370% since October. “I am positively amazed at our progress,” he says in his office in a corner of the Telegraph’s large newsroom close to London’s Victoria station.

These millions of registered users are current and identifiable. “I am talking in the narrowest possible definition; they have to be registered and active within the last 12 months,” Hugh says. “They have to be on one specific ID and not registered with a partner (organisation).” The TMG CEO wants to be able to track his audience from iPad app to phone to desktop, and to serve it with Telegraph branded commercial offerings.

This puts TMG in a different space from Guardian Media Group, which has a strategy based on user membership and donations while keeping open access to the Guardian’s digital content, and to News UK, which operates a harder paywall than the Telegraph with a “two clicks free” policy designed to generate registered users who it can quickly turn into subscribers. The Times recently announced it had accrued 2 million registered users of its own.

Hugh admits that other publishers will “question” his approach to focusing on registrations rather than subscriptions. “Particularly in America they will say ‘shouldn’t it be subs first?’ No, it should be registrations first,” he argues. “Everyone has their own take on what the future looks like but the reality is we have 25 million [UK] unique monthly visitors digitally [Comscore data] across all platforms and not all of those are going to have a propensity to subscribe but all are interested in the Telegraph in one shape or form. Registering enables us to form a direct connection with those users.”

Registration of identifiable users, he says, is “that tide that lifts all our boats”, from subscriptions to commerce and advertising. “There will be a point in the future when, in an advertising environment, you will not be able to trade users that are anonymous,” he says. “Maybe it’s a year away, maybe two years, but it’s coming.”

Hugh has set out his Telegraph vision in a five-page ‘Thinking Ahead’ document, compiled with editor Chris Evans and distributed to staff just before Christmas.

In it, Hugh outlined a plan to take Telegraph readers on “automated and personalised customer journeys”. ‘Thinking Ahead’ named six key subjects that the Telegraph will put a “special focus” on, namely politics, sport, luxury & lifestyle, business of technology, money and travel. The last two are cited by Hugh as offering the most immediate potential for commercial success.

Hugh, who was in Las Vegas this month for the vast technology showcase that is the CES conference, has a strong background in digital. He arrived at TMG almost exactly a year ago from Yahoo, where he was vice-president for EMEA. He was initially appointed as TMG’s chief operating officer, which gave him six months to appraise the business before he was made successor to Murdoch MacLennan, who stood down as chief executive after 13 years in the summer to become deputy chairman.

Hugh immediately recognised “the difference in brand between someone like a Telegraph and someone like a Yahoo in the impact that it has on society”. He speaks now of his desire to “leverage the heritage” of the Telegraph and “really become a modern-day media company”.

Editorial investment promised

This is, of course, easier said than done. The Telegraph has been through great upheaval in recent years, with MacLennan appointing a succession of senior executives to reposition the news brand for the digital age. For every new guru there was a new plan, and invariably a round of job cuts.

Hugh emphasises that his “Registrations First” approach comes with investment in 39 new editorial posts in the key editorial areas this year, and additional recruitment in data science roles to better understand the needs of the digital audience. He admits that this investment will impact on TMG’s bottom line, and claims that the owners, Sir David and Sir Frederick Barclay, are aware of this and supportive of the vision that he and Evans have outlined.

“I have worked very closely with the owners around our future strategy and they understand that significant investment needs to go into that,” he says. “By nature of the amount of investment that needs to go in, you are never going to get the return in the short term, so you will see that our profit levels will go down.” TMG announced operating profits of £32.2m for 2016, down by a third on 2015’s figure of £51.7m.

Hugh does not appear to harbour grudges against predecessors who may have missed previous opportunities for digital growth at a news brand that was the UK’s first to internet publishing, back in 1994. In the late noughties it created the pioneering Euston Project to explore commerce and other “new revenue streams” made possible by its digital output.

But Hugh has clearly never heard of the Euston Project. “This is a business that is known for its quality journalism and has diversified historically better than many others,” he says diplomatically, before noting that TMG’s Travel commerce business has grown by nearly 70% in the last year. Telegraph Travel is the 10th largest travel website in the world and its readers are encouraged to partake in tours such as a forthcoming trip to Russia in the company of BBC World Affairs editor and Telegraph columnist John Simpson.

To outsiders, the critical challenge facing the Telegraph is to replenish a core readership that is the oldest in the market. Some would be surprised to learn that, since early last year, the Telegraph has been flouting its wares on the youth-focused Snapchat platform, where Hugh says it has built an audience of several million. But he is not targeting millennials for their money. “We are trying to expand that core Telegraph audience but it’s more natural to go 35-plus than 13-plus,” he says of TMG’s wider strategy.

But by reading Telegraph content on Snapchat, young people will get an exposure to the brand that might reap rewards later. “As people mature and get older the Telegraph is something we want them to know and respect.” The Telegraph also derives an “R&D” benefit from being on Snapchat and Amazon’s Echo Show by learning how future audiences will want news.

There are no plans to emulate the Guardian and switch to a smaller newspaper size. “We are proud of the broadsheet format and have no plans to change to a tabloid,” says Hugh. “The newspaper is our flagship product, no doubt about it.”

TMG is “very proud” of its print subscriber base of more than 230,000.

A product so prized should not be given away for nothing as bulks in hotel lobbies and departure lounges, it claims. “The cost isn’t worth it and there are much better areas for us to invest in.”

It leaves the Times as Britain’s most widely-distributed quality paper. But Hugh wants to be judged on registered users, Comscore digital audience and paid circulation. “At news trade we maintain our lead – that’s actual sales and that’s what our advertisers should care about and that’s when people are truly reading the newspaper,” he argues.

“Giving away freebies to make a number look better than it is – that’s a 20th century game. I’m trying to move us ahead.”

Ian Burrell's column, The News Business, is published on The Drum each Thursday. Follow Ian on Twitter @iburrell

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