Guardian Newspaper Group Could Run Out Of Cash – Plans Large Digital Overhaul

News June 16, 2011 1 Comment

This article on the Guardian paints a fairly stark picture about the media group that owns the Guardian and The Observer, as it states that they could run out of cash within 3-5 years if things keep going as they are now.  This follows a loss of £33m in the last financial year. Andrew Miller,  chief executive of the Guardian Media Group said that business operations needed to change in order to avoid the predicted loss, and this features a significant focus on and overhaul of their digital strategy. Significantly, while job losses are not being planned at this stage, digital is being prioritised, with plans for new products such as a digital U.S. edition having to come out of existing budgets. Meaning staff can expect some serious bootstrapping to back the digital strategy, which the Group are betting will take off for them. It’s impressive to see what is still a traditional news group investing so much of the company into digital, in the hope that this will pay off, and doing something drastic to save themselves among an increasingly turbulent news industry.

Bye bye print, hello digital

In no uncertain terms, the Guardian Media Group are clearly abandoning ship here and finding a way to speed up the transition to becoming a more digital-centric company, also aiming to beat off competitors here by trailblazing the move. In their own reporting, they’re calling the move ‘digital-first’, which shows the support they’re giving for this medium, and also how strongly they believe this can be monetised. They’re not making this move purely because they’ve seen the next shiny thing and have cash to burn to see how it works out for them. Their digital strategy is their (according to them) big chance to save the Group, taking planned investment away from print to put it into digital. This investment is to the tune of £25 million, showing that we can expect a radical overhaul of their products and their entire digital strategy. According to the Guardian Media Group, this is also getting them one step ahead of the competition, by becoming digitally-centric, as opposed to just adding digital on to their existing strategy.

Interestingly what this move also represents is a move away from a pure UK focus. As mentioned in the Guardian article, the digital strategy includes a planned (though not comfirmed) launch of a digital title in the U.S. What the Guardian could do here is to develop a completely new publishing model that can be brought overseas to impact other markets and change the way the news industry functions. No small feat, but are they taking on the impossible?

The bigger challenges

Part of the overhaul plans by the Guardian also include changing their core print product, for example in refection of the fact that a large percentage of their audience read newspapers in the evening. So what these readers are looking for isn’t necessarily breaking news, but more reasoned analysis, akin to the experience of watching NewsNight. This represents a shift in the consumption of news overall, with habits changing as we consume more of our content online. We know where we want to get our breaking news from – we generally go to Google to that. What we need from publishers is that content that you can’t get anywhere else, where you have access to their expert columnists and analysts. Of course the challenge for publishers is in proving that you still want to go to their titles for that. Regardless of the particular audience, newspapers will also have to turn to social media here, to give people a teaser of the experience they can get, before buying the newspaper in full either offline or online. And of course it all comes down to the monetisation model. The notion of buying a newspaper may be completely obsolete in 5-10 years, as new models evolve, borne of digital considerations and practices. Exciting times ahead…

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