Guardian News & Media (GNM), the publisher of The Guardian, announced yesterday that it would become a "digital-first" organisation. Alan Rusbridger, editor-in-chief of GNM, and Andrew Miller, chief executive of Guardian Media Group (GMG), revealed outlines of a "major transformation programme", which would push operations at The Guardian "beyond the newspaper, shifting focus, effort and investment towards digital, because that is our future".
Miller described The Guardian's undertaking as "a major transformation that will see us change from a print-based organisation to one that is digital-first in philosophy and practice". The company said the new strategy was a response to challenges facing the whole media industry, which is seeing on the one hand a decline in print circulation and advertising revenues, but on the other, rapid growth in digital audiences.
The GMG chief also said that the newspaper and its sister publication The Observer had lost £33 million in cash terms last year. He warned that unless GMG changed its business operations, it could run out of cash in three to five years. The new strategy includes a plan to save £25 million over the next year. More importantly, the newspaper aims to double its digital revenues, which are expected to be at £47 million in the current financial year.
As for the practical changes that the new "digital-first" approach entails, Miller said to Yahoo! News that roughly $40 million worth of resources that had been earmarked for the print version over the next five years would instead be funnelled into its digital operations and new brand marketing. The Guardian would also target further growth in digital audiences, in which it saw a 40-percent year-over-year increase in 2010. An important part of this is The Guardian's drive to expand its digital readership in the US.
The newspaper is currently putting together a team for its upcoming US website and earlier this year appointed the head of its digital operations in the US. It hopes to have the site up and running by September, building it gradually as revenue starts to come in.
The new strategy's effects on The Guardian's print edition - which saw a growth in readership last year - will be drastic. Reflecting the fact that half of its readers read the paper in the evening, the print edition will take a step back from reporting breaking news and will instead take a more analysis-driven stance. The print edition will also lose pages and run less news reporting, Miller said to paidContent:UK. In terms of staff cutbacks, the new strategy would likely mean layoffs from the editorial side, Rusbridger said to GigaOM.
The Guardian has long been a forerunner among newspapers that have an "open web" policy, having been for example clear about its anti-paywall stand. It has, however, released an iPhone app that includes a payment system. This week, that app was reported as having been downloaded more than 400,000 times and having 70,000 paid subscribers. Most probably mobile news consumption will have an important role in The Guardian's new strategy, and its iPad and Android apps are currently in the works.
Making digital instead of the print edition the main priority and reorganising operations accordingly is clearly a brave move from a major newspaper, but in the light of current developments, it could also be the only option for a sustainable future. "All newspapers will ultimately exit print", Miller said to paidContent:UK, but said that they haven't set a timeframe for such transformation at The Guardian. Nevertheless, this move keeps The Guardian at the forefront of newspapers with an open online strategy, as opposed to those that have created digital subscription schemes for their reporting. But this strategy also means that The Guardian is now under tremendous pressure to succeed in its ambitious plans to increase its web-based revenue flow.
The 'digital first' philosophy has already been fully embraced by the Journal Register Company in the US under the leadership of John Paton, and this strategy has inspired Canada's Postmedia to follow along a similar path.