"Don't bugger this up," David Pemsel said when he took over as Guardian's CEO in 2015, when his father, who was always gracious and heavy-handed, gave him a piece of advice that was close to swear words. Pensell was born in London to a traditional Kochi family, the father of a British broadcaster (BBC) and an artist mother. His father's serious advice stemmed from the British family's recognition of the Guardian, and for Pensell, who grew up reading the Guardian, the job had a special sense of mission and pressure.
The Guardian
If you count the predecessor, The Manchester Guardian, the Guardian has a history of more than 200 years. Originally, the Guardian was similar to large media groups in Europe and the United States, and was held by the founder's family as shareholders of the group. In 1936, however, the actual controller of the family at the time made a far-reaching decision – to protect the financial and editorial independence of the media in the long run, he transferred control of the media to a newly formed trust, the Scott Trust Limited, which was renamed The Guardian, and the headquarters were moved from Manchester to London. Scottrade Trust's Guardian Media Group (GMG) is owned by Guardian Media Group , which is dominated by print media , The Guardian Weekly and The Observer.
It can be said that the independent quality of the Guardian's news content is guaranteed from the fundamental ownership.
However, since the 1990s, the popularity of the Internet in European and American countries has brought an unprecedented impact to traditional media exported with original content, and the successive helmsmen of the Guardian have had to try to ensure that this century-old ship is not sunk and engulfed in the winds and waves of the times.
With a keen sense of the Internet's trend of globalization, Alan Rusbridger, who has been the guardian's editor-in-chief since 1995 and has managed the content and management, has invested 3 million pounds in the guardian website in the two years of his tenure, and in 2011 and 2013, he laid out the US and Australian versions of the guardian. Soon, the Guardian, which at the time ranked no. 9 in the UK in terms of circulation, rushed to No. 5 in 2012 for global news site views, with 5.3 million weekly newspaper subscribers and online website visitors combined.
Unfortunately, the huge number of global users has not been able to cash in the funds to support the operation of this media operation, because Rasbridge refuses to build a paywall, and his years of transformation and expansion attempts have not been able to find a viable profit model for the Guardian in the future. At a time when the number of Guardian users and global influence reached an unprecedented peak in 2012, GMG's operating situation was not optimistic: the subscription revenue of its two print media, The Guardian and the Observer, still accounted for 75% of the group's total revenue, but the circulation declined year after year, of which the Guardian circulation fell sharply from 400,000 in 2006 to 215,000 in 2012. During this time, GMG's annual loss was between £30 million and £40 million, and the financial situation seemed unsustainable.
Pensell's entry became a key node for the Guardian to break free from the quagmire of losses and eventually break even, or even turn around.
Pensell photo, taken by Linda Nylind
Prior to joining GMG in 2011, Pensell had extensive experience in the media industry, with particular expertise in media commercialisation, having served as Marketing Director for the UK's TVB operator Independent Television Network (ITV). In 2013, Pensell was promoted from the position of Chief Commercial Officer to Executive Vice President, responsible for GMG's business operations and global integration operations in the three basic projects of the United Kingdom, the United States and Australia, and in 2015, Pensell was promoted to CEO, formally in charge of GMG's overall business and financial strategy, focusing on the digital transformation and business model exploration of the Guardian, until the Guardian turned a profit in 2020.
After a series of management system reforms and business strategy adjustments, the Guardian, which lost £57 million in 2015, achieved a profit of £800,000 in 2019 three years later, which is also the first profit of GMG in 25 years since the wave of digitalization.
What did Pensell do to turn the tide in just 3 years?
When Pensell took over the Guardian as a whole, the Guardian's team presented a peculiar situation: with the industry's top business and digital talent, the undisputed top-notch editorial team, but lacking an operating model that encouraged cross-departmental collaboration, flexibility and allowed employees to methodically try innovative ideas. As a result, all departments of the Guardian are in a state of "semi-paralysis" that is tired of responding to changes in the outside world: global news issues are overwhelmed, traditional print circulation is falling off a cliff under the impact of the digital wave, and online and offline advertising business is stagnant.
Pensell made two regulatory adjustments, which now seem to be a watershed moment for The Guardian from a "traditional media" to a "media company". First, he used the OKR system that was popular in Silicon Valley technology Internet companies on the other side of the Atlantic in the Guardian newspaper, using goals and key results to measure and control the direction and effect of employees' work; Second, he proposed a "huddle" system, which brings together employees from different departments such as product, editing, and commerce, so that they can solve a problem or complete a specific task in a relatively autonomous way on a quarterly basis.
In London, where "century-old stores" such as the BBC and The Times are highly regarded, this innovative approach of the Guardian initially caused a lot of doubts and even ridicule in the London media circles, but it soon showed a "barbaric growth" trend within the Guardian, with nearly 60 large and small groups growing in three years.
Pensell's "hugging group" has proven to be very effective, and some groups have incubated and bred a response to media commercialization under the digital wave that will be crucial for the Guardian in the future. One of the challenges the group needed to address was: "How do you create a reading experience that makes readers feel a strong willingness to pay for the media in a non-coercive state?" This is the birth of the "Guardian membership system" that laid the basic plate of the Guardian's business model.
At that time, in response to the impact of the digital wave, mainstream media in Europe and the United States have built mandatory "paywalls". Most media operators have to do their best to maintain an almost paradoxical and ingenious balance: on the one hand, they must convert as many high-quality users as possible into paid subscriptions, so as to preserve the survival of commercial media in the digital era of declining print media distribution and crowded out advertising by platforms; On the other hand, it is necessary to accept the harsh reality that high-quality users who invest a lot of money to pull new and retain and are eventually ruthlessly rejected by the paywall.
In the United Kingdom, as one of the top high-quality content platforms in finance and economics, the Financial Times handed over a textbook answer: every network user can read 3 financial times articles for free every month, after which the paywall will pop up, recognizing the high-quality content of the Financial Times, or readers who have just needed the information of the Financial Times will naturally enter the paying group, otherwise users will have to switch to other sources.
However, the Guardian, which has always adhered to the concept of open sharing on the Internet, did not choose the "paywall" subscription model commonly practiced by its peers, but launched a "Guardian membership system" - a kind of British gentleman's mindset: users can read all the quality reports of the Guardian for unlimited free, and at a time node obtained by exquisite calculations in the reading process, there will be a pop-up window that shows "Are you willing to give the Guardian 1 pound of financial support?" ”。 Even if the pop-up window is turned off, users can still have a unimpeded continued reading experience.
Such a non-coercive approach caused a lot of controversy in the media circles from the beginning. Most peers believe that the Guardian's approach is very risky - under the non-mandatory reading system, users can ignore the pop-up window and choose "white prostitution". This bold attempt to deliver trust entirely to users has the potential to lead to a commercial dead end.
Pensell made this "counter-mainstream" decision with a mindset that simplifies complexity: the unique trust structure behind The Guardian is ultimately designed to allow independent and high-quality news content to have the greatest impact on the widest user base, so the paywall that keeps users out must not be taken into account; Equally important, the Guardian's sole purpose in commercializing is to support independent, high-quality reporting by journalists and editors, so Pensell must find a sustainable solution that is economically sufficient to support a team of good content.
When the Guardian membership system was first introduced, there were three levels: "Friends" who did not charge a fee could read the news of the Guardian and participate in the Guardian's offline activities; Partners, which cost £15 per month, enjoy discounted fares for The Guardian offline events and priority access to Guardian offline events; Patrons, who charge £60 a month, can visit the Guardian's newsroom and printing house in addition to the above benefits to learn about the Guardian's writing process. In addition to membership, Guardian users can also donate any amount to the Guardian through the website.
Whether it is a membership system or offline activities, it is actually the product of the Guardian's interaction with users and understanding their ideas and needs. Back in 2012, the Guardian held a weekend celebration in London's King's Square, attended by around 6,000 Guardian readers. At this celebration, readers said they are willing to pay for more offline activities of the Guardian, but they also hope that the Guardian news will not charge a fee, so as to attract more readers. Since then, the Guardian has conducted a series of reader surveys, all of which have received similar feedback.
With clear user needs, the Guardian has launched a new project ,Guardian Live– hosting offline events in the UK and around the world, including discussions, debates, interviews, guest speeches, festivals, etc., with the aim of transforming print and online media into a new offline experience.
"Knowing our readers, getting engaged readers, and paying for our content has been the Guardian's long-term strategy," Penceer said. Guardian membership allows us to get more C-end revenue and connect the media with readers in real life. Guardian membership allows us to profit from a global readership of up to 100 million people while maintaining our commitment to open journalism. ”
In addition to the Guardian membership system, the Guardian has also launched a variety of ways to play to meet the digital transformation. In 2018, The Guardian launched a new podcast, Today in Focus, each episode of 20 to 25 minutes, with in-depth coverage of the day's headlines around the world. Users can choose to listen to the show on the Guardian website or in a dedicated blog app.
Early on smell of the upcoming storm in the media industry by the launch of mobile electronic devices, the Guardian launched its first iPhone APP in 2009, opening up the operation of mobile terminals. The £2.39 app contains the latest coverage from The Guardian and covers photos and podcasts, topped the BEST-seller list of paid apps on the UK app store as soon as it launched.
Since then, the Guardian APP has been continuously revised and in line with the Group's strategy, the app download fee has been abolished. Currently, the free version of the Guardian APP has the option to pay a monthly fee of £2.49 to advertise, read past Articles of the Guardian, and play crossword puzzles every day (a spelling game for all ages in English-speaking countries). The paid version of the APP costs £11.99 a month, which is an APP designed for young people growing up in the digital age, its page is more designed and interactive, and users can get a new reading and viewing experience by sliding the page left and right, up and down.
While actively doing digital transformation, the Guardian has not abandoned the traditional paper media, but combined with the needs of contemporary users to "revitalize" the paper media. The Guardian Weekly, which was once published as a newspaper, was repackaged into a magazine in 2018 and distributed at airports, hotels, subway stations and other retail locations. The magazine edition of Guardian Weekly, while still covering news reports, commentaries and feature articles from The Guardian and The Observer, has placed more emphasis on design and photographic content to attract readers around the world to pay for a beautiful, high-quality paper reading experience.
In the past two years, the Guardian has even ventured into the documentary distribution industry. In 2020, marking the 75th anniversary of World War II, the Guardian released a 24-minute documentary co-produced by VR&AR production company Oculus and video game developer Respawn Entertainment Colette. The documentary, which tells in French about the French resistance to the occupation of Nazi Germany during World War II, won the 93rd Academy Award for Best Documentary Short Film. The following year, when racial outrage arose in the United States, the Guardian released The Black Cop, a documentary film directed by Cherry Oteka, showing the link between racial issues and police violence, which won the Best Short Film Award at the 75th British Academy Film Awards.
As of August 2022, the guardian's entire content remains open to all readers, and users can support the guardian in a number of ways: a one-time donation, regardless of the amount; a monthly subscription to the Guardian newspaper for £11.99; £13.75 a month subscription to Guardian Weekly magazine; £11.99 per month can also be used to subscribe to The Guardian's digital membership, free of ads and unlock all mobile products and features; the Guardian 'Patron' threshold is at least £1,200 per year, will be invited to attend offline events open for patrons, get a free ticket for online live events, be invited to attend family dinners hosted by the Guardian, etc.
All of these initiatives have been unprecedented successes in terms of both influence and commercialization.
From the perspective of financial data, the Guardian's annual revenue has increased from 195 million pounds in fiscal 2013 to 256 million pounds in 2022, and the profit and loss situation has increased from the annual loss of tens of millions of pounds in the 2013 and 2014 financial years, gradually achieving break even, and even roughly profitable, and the latest fiscal year 2022 profit is 11.7 million pounds.
In addition to the overall turnaround, GMG's achievements in digital transformation are also reflected in commercial revenue, and the proportion of digital and print revenue has gradually changed from nearly 3:7 in 2013 to nearly 6:4 in 2020. By the end of 2021, the Guardian's digital terminal has 1 million global paying users, and nearly 400,000 donations of varying amounts can be received each year.
The Guardian Media Group (GMG) revenue source for the 2013-2022 financial year, data from GMG financial report, by 36Kr chart
From the perspective of its influence on global users, the Guardian website currently has 5 million UVs per day, making it the third most popular news media website in the English-speaking world.
Of course, whether it's the ingenious membership payment system or the narrative of turning a "century-old store" into a profit within three years, the Guardian's transformation has been accompanied by doubts and even ridicule. The snarky British tabloid drew its peers into anthropomorphic caricatures, ridiculing the Guardian's non-mandatory payment system as a "begging tactic".
There are also many in the industry who see the success of the Guardian's business model as a single solution that cannot be replicated by other institutions and is more difficult for markets in other economic systems to understand and accept. The trust structure backed by the Guardian and the philosophy it represents to ensure the financial and journalistic independence of the media make the Guardian's relationship with various stakeholders simpler and purer.
In Pensell's words, the Guardian has neither a single operator nor a shareholder, and the main income comes from the reader's membership fees and donations, which are relatively directly used by the media's own editorial business team, rather than becoming a yacht or a sports car for the operator or shareholder, so "basically what we write, what decisions we make, what business we invest in, we have to think about how users see this.". That's why it's hard to simply replicate the deep relationship between the Guardian and its users, whether it's the media owned by public institutions or the commercial media held by large private groups.
Under the obvious limitations, the Guardian has handed over a classic answer sheet for traditional media to cope with the impact of digitalization and respond to the needs of the times based on its own unique ownership structure. It represents the information fragmentation brought about by today's digitalization, the traffic monopoly brought by the strong channel platform, and the decline in media credibility brought about by commercialization, and other harsh living environments, and the original content media is the closest to the original intention.