The Telegraph's roadmap to 1m paying subscribers and financial sustainability

“If you get to 1 million subscribers, and your ARPU (average revenue per user) is healthy enough – you have to expect it to be comfortably in triple figures – then you almost entirely replace what you used to have in the past,” he says of potential digital reader revenues. “If you get to that point then, even if there weren’t any of the other revenue streams, you are in a good spot.”

For years, commentators have pointed to the Telegraph’s worrying demographic profile and speculated that the paper could expire with its broadsheet readers, historically the oldest in the UK national market. But there are clear signs of its rejuvenation in digital formats, buoyed by its central role in the drama of Brexit and an editorial commitment to be a leader in covering the technology sector.

The 10-1-23 vision

Hugh’s 10 million registrants target was set earlier in his two-year tenure as chief executive, along with the challenge of hitting 3 million by the end of 2018, which it achieved comfortably. He is now being “much more specific” about the Telegraph’s endgame for sustainability: 10-1-23.

Outside his office is the Telegraph newsroom. A large mural spells out the “Our Vision” mission of 10-1-23, alongside the publisher’s three “core beliefs” of “Enterprise”, “Fair Play” and “Enjoyment”.

High up is a giant electronic scoreboard so rich in data that it would not look out of place at a test match cricket ground. The most prominent figure is the registrants total, standing at 4.43 million, which represents good progress since the 3 million figure was reached last August. The daily tally skips along like the engagement metrics of a popular social media post, from 5,269 one moment to 5,277 the next.

There is no number given for what is clearly the most important measure of all: total subscribers. But at the time The Drum visited, 235 new subscribers had signed up that day by 4pm. This daily “run rate”, as Hugh describes it, is increasing. “The run rate is double what it was six months ago [and] we have more subscribers than we have had at any time in the past.”

The journalists, working beneath this big scoreboard, can’t hide from the commercial consequences of the content they produce. The stories that have triggered the most registrations are ranked in a league table. On this day, close to the Grand National Festival, horse racing coverage is proving a popular pathway for sign-ups, as are stories on Brexit, Game of Thrones and Madeleine McCann.

Hugh makes no secret of the subject which does most to drive deeper reader engagement and thus subscriptions. “Brexit is quite clearly the number one at the moment,” he says.

According to Boris Johnson’s declaration in the register of members’ financial interests, The Telegraph pays him £23,000-a-month to write his column. Having the MP who is priced as the favourite in the betting markets to be the next leader of the Conservative Party on its editorial team makes the Telegraph a must-read for many.

Three days before 29 March, the original date for the UK’s departure from the European Union, The Telegraph booked Central Hall in Westminster to stage “Boris on Brexit Live”, in which Johnson was interviewed by former Telegraph editor Charles Moore before a packed house of 1,700 people, including Hugh. “It was great,” he says. “I have a lot of interest in what’s going on in politics as a whole, but so does our audience.” The paper’s subscribers paid £20 a ticket (general admission was £75).

The Telegraph was one of the most emphatic media backers of Brexit, celebrating the result with a front page headline proclaiming: “Birth of a new Britain”. Since 2016, some of its media allies on the Leave side of the debate have softened their editorial positions, most notably The Mail and The Express. The Telegraph, with Boris on board, seems to dominate the ground on the right.

Hugh is careful not to stray into territory where editor Chris Evans holds sway. “I think the most important thing as a news organisation is to have a clear position, and to explain the opportunities and challenges,” he says. “I think our editorial team do a fantastic job on that, and the subscription numbers are testament to that. It’s a passionate topic and one that our readers are deeply interested in, so it’s right that we give it its fair coverage.”

As well as Boris, Telegraph business writers such as Ambrose Evans-Pritchard and Jeremy Warner give a subscription-driving perspective on the implications of Brexit, he says. Christopher Hope (aka Chopper) is the paper’s chief political correspondent and produces the highly popular “Chopper’s Brexit Podcast”, promising the “inside line” on the seemingly interminable saga.

"If you'd like to read it, pay for it"

In the past six months, The Telegraph has put all its politics and business coverage behind its paywall as designated “Premium” content. Standard access to Premium material costs £2 per week, with a superior package that includes the digital version of the paper priced at £3 per week (rising to £6 per week after three months). “We are proud of it and proud to say that if you’d like to read it, pay for it,” says Hugh of the paywalled content. “Because we have been doing that for 160-odd years.”

A year ago Hugh took the decision to stop bulk distribution of the printed paper, to get a truer sales figure. Although it resulted in The Telegraph falling below The Times in total circulation, he has no regrets. The Daily Telegraph outperforms its rival in paid-for sales, with an ABC circulation of 345,618, which is down 8% on the previous year.

Hugh argues that there is “inefficiency” in the industry’s traditional competitiveness over raw circulation and says this is the reason that he won’t give out subscriber numbers (even though he recently became a non-exec director of price comparison site GoCompare). “We don’t disclose our subscriber numbers because it becomes a volume game which creates the wrong incentives,” he explains. "I’m not interested in ‘this newspaper got to the 1 million before this newspaper’ because if the 1 million had an ARPU of 15 and this one has half a million (subs) but an ARPU of 115 then I will take [the latter] everyday.”

There is a key difference between Telegraph Media Group and some others in its market, he points out. “We are doing all of this whilst remaining profitable which obviously is very different to many of our contemporaries.” Its last set of annual results showed pre-tax profits of £13.7m, down by half on the previous year. The company partly attributed the fall to a £10m investment programme that saw 40 new journalists recruited in 2018, with 44 more to come over the course of this year.

Some of these new arrivals are helping to build The Telegraph’s reputation in covering tech, which Hugh regards as “an area that is under-represented in the UK from a coverage perspective”. Last year he launched Technology Intelligence as a global journalism initiative to cover the tech revolution. It was the presenting partner for the TechX stage at last month’s Advertising Week Europe. Last week, The Telegraph launched its inaugural Technology Hot 100 list, ranking individuals by wealth. It was headed by fintech entrepreneurs Rishi Khosla and Joel Peralman, founders of OakNorth Bank.

The Telegraph is also making a play as a leader in coverage of women’s sport, with new women’s sports editor Anna Kessel heading a dedicated team. All of this is part of the refreshing of a historic brand.

The (tough) road to 1 million

Reaching 1 million subscribers will be a tough challenge.

The Telegraph dipped below 1m in print circulation in 2003, which seems like another era in news publishing. It was seven years later that James Murdoch took the then radical step of putting a paywall around a general news site, The Times. Today the Telegraph journalism’s now has a UK monthly audience of 23 million-25 million across multiple formats. But its focus is on the inner core of registrants and subscribers. “We don’t think as much about overall global reach as much as we think about our pool of registrants – you super serve your registrants and your subscribers,” he says. “Your registrants are your future subscribers. Our entire strategy is centred on that.”

Hugh believes that anonymous readers of news sites are destined to be seen by advertisers as having little value. The users he wants have to be coaxed into a paying relationship.

“The vast majority of our subscribers have registered in the period before. They don’t just suddenly decide overnight to subscribe – registration gives you an ability to drive engagement which then encourages the subscription,” he says.

“You will never get all 10 million registrants to subscribe but to get give or take 10% is what our aim is.”