A simple graph shows why the Guardian’s future does look bleak
Dear the Guardian: Please let me give you more money. Sun commentator Kelvin MacKenzie predicts that the Guardian will cease publication within 10 years, claiming "circulation fell on Monday to an all-time low of 200,000".
One problem is the Guardian's successful digital services. I've bought the Guardian every day since the start of 1995. Last year I got an iPad and an iPhone. Although I paid £3.99 for the Guardian iPhone app, I now no longer buy the weekday paper. Ever. This graph shows how much money I have given the Guardian Monday to Friday for the last 16 years.
I've gone from paying £230 a year for weekday news to £4
The collapse in what I pay is because I read most of the news for the next day's newspaper on the Guardian website on my iPad the evening before. And I read anything new on my iPhone on the way to and from work. The newspaper has nothing in that I need.
As ever, there are a few caveats with this sort of data.
Weekday only
I've excluded the weekend papers which I still do buy (though only about half as often as I used to). Partly because I got bored trying to find the cover prices, and partly, I admit, because the graph wouldn't look so dramatic ...
Cover price history
The cover prices for the Guardian are hard to find but I think they are as follows (the dates are when it went up to the new price and it was 45p in 1995): 2001 50p, October 2002 55p, Autumn 2004 60p, January 2006 70p, September 2007 80p, Jan 2009 90p, Sept 2009 - £1.
The Guardian's share
The Guardian doesn't get all the cover price. The publisher noted back in 2007 that retailers receive 25% of the cover price of each weekday Guardian. It's worse than that when it comes to apps of course - it has to pay 30% to Apple.
Advertising revenue
The Guardian does of course get advertising revenue. According to one Guardian editor in 2004: "The basic cost of producing the Guardian every day is (of course) more than the cover price. No matter how many readers bought it, we would lose money, in fact an increasing amount of money, without ad revenue - unless we put the cover price up to what it really costs us to make the paper, which is somewhere north of £5 a copy."
Part of the reason I don't buy the paper is because I look at the website. I doubt that the Guardian can charge online advertisers a marginal price for each extra viewer that's higher than that it charges for each extra print reader. So I presume my switch from print to digital has cost it advertising revenue as well.
But even if they earned the same, it still doesn't make up for the loss in direct revenue that the graph shows as the website's free to access.
Please do something ...
I used to get the Guardian free as part of my first job as a researcher and a student. I've actually been reading it since about 1988.
So I hope it manages to do something about the graph. Given I used to spend £230 a year for my weekday news, I'd happily pay more than £4 a year for its iPhone app. That price point might be the first thing to examine.
Would you be prepared to pay for a combination of print and download media? And at what price point would that be an attractive alternative?
Online is here and now and no amount of hiding in amongst the classifieds is going to stop progress.
There is no doubt that the touchscreen navigation makes the reading experience something apart from the old laptop / pc experience, add to that the portability and versatility of the new tablets and smart phones.
You make a good point about the value of the news for you and matching your willingness to pay.
However, you are ignoring that the digital version of the Guardian also costs substantially less to produce than the paper version: printing (paper, ink, machines, warehouses, salaries), distribution (vans, petrol, insurance, salaries), stocks (including destroying the unsold copies), newsagents' fees, ...
An the other hand, newsprint generally still attracts a huge advertising premium. A print eyeball is normally (in the UK, in 2011, on average) significantly more valuable than a digital eyeball. Although, paid-for digital eyeballs turn out to be more valuable to advertisers than free digital eyeballs.
This talk of digital eyeballs reminds me of... http://www.flickr.com/photos/jamiemckerral/423225722/
Ana: running websites is not free. You have to pay for servers, techies, designers, IAs, video rights, bandwidth ... I wrote about this once here: http://econsultancy.com/uk/blog/6190-great-news-websites-are-completely-free-to-run
as always - a great idea, well executed, Malcolm!
interesting that apple ate much of the music companies' lunch with their consent, now the same appears to be happening with news.
it would be interesting to see a graph of the 'profit per reader' figure or something like that. ie, how do the changes in advertising, reduction in production/distribution costs, etc affect all of this?
dan
This is silly.
The guardian is doing relatively well compared to most newspapers, it is one of the main innovators in transitioning to digital
Recommended reading:
http://www.guardian.co.uk/media/2010/jan/25/guardian-editor-paywalls
That doesn't mean it makes any money though ...
Of course it doesn't, but a little bit of money is better than going bankrupt.
I think Kelvin's point, which started this, is that with a little bit of money they will be bankrupt. Which will be a shame.
If a little bit of money doesn't match your costs, you go bankrupt. Innovation without a sustainable business plan can still lead to failed business.
Interesting - similar experience, I started reading the Guardian back in the late 70s and bought it pretty much everday up until about a year ago. No I only buy it on weekdays if I am commuting, (about 3 days a week) so I can read it on tube. (though even then I have often read some of the content on-line the night before)
Usually buy the Saturday edition.
I'm reading it online using my PC so haven't even paid for an App (no iPhone or iPad).
I'm sure thya must be looking hard at some sort of Paywall. I'd be comfortable with paying something to access the site.
Well done for visualising it so starkly.
It's not "silly", it's real.
Of course, at least The Guardian is charging you *something* for the product you've used to replace print; not everyone is.
Also - you're doing them a favour by using the £3.99pa mobile version versus web - the ARPU on the mobile product is higher than on the web product.
True. Although the Daily Mail iphone app is £8.99 a year. Even that seems too cheap to me ...
I thought the Guardian's "What is our journalism worth? £2.39 for a lifetime supply" iPhone app was one of the turning points of this whole debate.
A lot of my Guardian consumption has migrated to the website, but I still buy the paper in the morning even though it's often left unopened because I've already read much of it online.
I know this isn't great for the environment but since the paper doesn't have any donation models or thank goodness a paywall, it does mean at least I have some way of paying them and their journalists for the content I consume.