Asking readers nicely turns out to be a profitable strategy for the Guardian

My colleague Amol Rajan has written at length about the Guardian’s first profitable year since 1998.

Yes, it’s a lot to do with major cost-cutting in the newsroom – 120 journalists – and at the printing presses (it abandoned its uncommon, therefore expensive, ‘Berliner’ format). But it’s also about a bold experiment in making readers pay to read the news.

Here’s Rajan’s run down of what the newspaper did:

In all, if you include those who have left with roles that have closed, 450 positions have gone – of which 120 came from editorial. All have come from voluntary redundancy, albeit with some being gently encouraged to pursue that path.

The other significant saving in the past year, which has run into “several millions,” has come via the lower production costs of the tabloid edition, which replaced the Berliner format.

It has not been a cost-cutting exercise alone. The growth in revenues has been driven by a re-balancing between reader revenue and advertising, and between digital income and print income. This is a familiar story across upmarket publications. The Guardian’s transition has been effective.

In 2015/16, 40 per cent of revenues came from digital, and 59 per cent from print (other income was marginal); today 55 per cent of total revenues come from digital and only 43 per cent from print.

The transition, as Rajan puts it, is an encouraging update for a digital strategy that few, myself included, gave much hope of working: asking its readers nicely to pay.

The Guardian’s site doesn’t limit what people can read, or impose a monthly limit on articles. Instead, it asks frequent visitors to voluntarily contribute, either with a one-off payment or a monthly subscription that gets you some advanced features. It plays off the long-stanidng relationship it has with readers who not only read the Guardian, but consider doing so as part of their identity.

Rajan writes:

At present there are around 650,000 recurring contributors, and over 300,000 one-off contributions in a single year. Will the contributors disappear just as quickly as they arrived? That is, and must be, the constant question asked of The Guardian’s new model. But that the company should declare its ambition to get to two million subscribers shows confidence in the system.