Telegraph profit jumps as pandemic boosts subscriber numbers
The Telegraph has booked a sharp rise in profit for the year as continued growth in subscriber numbers helped to offset a wider downturn in newspaper revenue during the pandemic.
Telegraph Media Group (TMG), which publishes the Daily Telegraph, Sunday Telegraph and Telegraph website, posted operating profit of £28.3m in 2020 — up 76 per cent year on year.
The growth was driven largely by booming digital subscription revenues, which increased by £13.7m to £31.5m, as well as cost-cutting during the pandemic.
Total subscriber numbers were up by a third to 562,000 by the end of the year, with this figure passing 600,000 as of March.
Overall revenue dipped 12 per cent to £235.2m due to the continued decline in print advertising and newspaper circulation, as well as the added impact of the pandemic.
But average revenue per subscriber — a key metric for the media group’s growth plans — remained broadly flat at £193.33.
The Telegraph also said it had repaid all the money taken as part of the furlough scheme.
“2020 was a challenging year for all businesses in the face of a global pandemic; but the Telegraph’s subscription growth continued,” said Nick Hugh, TMG chief executive.
“This clearly demonstrates how our subscription strategy, which recognises the quality and value of our journalism, is working.”
Subscriber shift
The Telegraph has set out a three-year turnaround plan as it refocuses on its digital offering and looks to convert readers into paying subscribers.
The company said it was on track to meet its target of 10m registered users and 1m paid subscribers by 2023.
The strategy reflects attempts by news publishers to shift to a more sustainable business model as advertising revenues are increasingly dented by changing reader habits and the dominance of tech giants such as Facebook and Google.
However, the changes to publishing models have caused disquiet within the industry. The Telegraph sparked controversy last month after a leaked memo from editor Chris Evans appeared to suggest that journalists’ pay would be linked to the number of subscribers they attracted.
But Evans denied the plans, which have not yet been finalised, would lead to journalists chasing clicks, insisting instead that the subscription strategy was the “opposite of clickbait”.
News outlets have battled a decline in advertising income even as readership has surged amid higher demand for reliable information during the pandemic.
Figures published today by the Association of Online Publishers and Deloitte showed that while overall digital publishing revenues slipped 0.8 per cent in 2020, subscription revenues were up more than 42 per cent.
The Telegraph warned of “extremely challenging” conditions for the remainder of the year due to the ongoing impact on the advertising market and a hit to commercial activities such as travel and events.
But the media group forecast further profit group this year and said it expected subscription revenues to account for half its total revenue in 2021 — up from 42 per cent last year.