WAN-IFRA

Shaping the Future of the Newspaper

Date

Wed - 26.11.2014


Mail Online to reach profitability this year?

Mail Online to reach profitability this year?

It’s easy to find pessimistic statements about the impossibility of traditional newspapers making real money from online news. But the gloom isn’t everywhere. Mail Online’s publisher Martin Clarke told investors last Wednesday that the newspaper website is expecting to become profitable for the first time this year.

According to paidContent, Clarke stated that the site expects to break even this year, with revenues of £25m. This figure is expected to rise to £45m in 2013 and £100m within the next five years. Clarke shares these projections despite the fact that, last November, Martin Morgan, CEO of Mail Online’s parent company DGMT, said that “profitability on a meaningful scale is not going to be until 2013 or so,” according to paidContent.  

Not only does the likelihood of breaking even seem imminent, it also represents a return on a relatively modest amount of money. PaidContent notes that Mail Online has cost about £25m to build and employs just 35 journalists in the US. Peter Preston at The Observer pointed out earlier this year that the UK head office of Mail Online only has about 25 seats. Yet despite this lean investment, Mail Online now receives more monthly visitors than the New York Times, according to comScore.

When it was released last January, this comScore data was somewhat controversial, and a New York Times spokeswoman responded that the Mail was “not in our competitive set”. But Clarke hit back last week, stating that Mail Online’s current success means that it has a “new competitive set", made up not of other newspapers, but of all digital media organisations. Journalism.co.uk quotes Clarke, who states, “our aim is to become quite simply one of the biggest digital news providers in the world. We're already bigger than BBC News, the New York Times, Fox News and ABC News - and we're not that far behind digital-only giants like AOL-Huff Po and MSN. Every one of those rivals employs three, four, five or even ten times more online journalists than we do."

According to Journalism.co.uk, Clarke also asserted that Mail Online’s popularity was not down to SEO and SMO optimisation, but was the result of catering to the interests of its core audience. “It's those people addicted to the home page who drive our growth. They consume 80 per cent of our page impressions," Clarke stated, noting, "if the last two years have proved anything, it's that we're actually quite good at this business.”

But not everyone is convinced. Press Gazette editor Dominic Ponsford published an editorial today calling Mail Online’s projected £25m of revenue a “drop in the ocean” for The Daily Mail’s publisher, Associated Newspapers. Ponsford writes that the site “may be set to cover its own running costs, but it will still owe a great deal of its success to publishing the content of Daily Mail and Mail on Sunday print editions – whose editorial resources it is nowhere near to covering.”

Yet Peter Preston wrote earlier this year that Mail Online’s success had little to do with the print edition of the paper. Preston noted that the Mail “runs its online operation under an editor – Martin Clarke – who’s free to produce a digital version that, by the end of a working day, bears almost no similarity to what Paul Dacre ordains for print.”

But Ponsford questions the success of Mail Online further, writing that £25m a year in revenue is equivalent only to a “biggish UK regional daily”. Ponsford argues that that “it is only because Associated Newspapers’ print titles remain successful (generating an operating profit last year of £76m) that the company has been able to indulge in the luxury of creating such a huge, and as I write, loss-making website.”

But although it is true that revenues for DMGT’s regional publisher Northcliffe are reported to have started picking up, over the past six months the publisher’s overall revenue has dropped 10%, advertising revenue has dropped 5% and circulation has fallen by 5%, as we reported earlier. By contrast, Mail Online has seen its numbers go up and up, with revenue rising by 69%.   

Sources: Guardian (1) (2) (3), paidContent (1) (2) (3), Journalism.co.uk, sfnblog, Press Gazette

Author

Hannah Vinter's picture

Hannah Vinter

Date

2012-04-23 16:57

Shaping the Future of the News Publishing


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