How The Australian returned to profit for the first time since 2008

Earlier this week, The Australian revealed it has finished FY17 with an operating profit of $13m, pushing the paper back into black for the first time since 2008's financial crisis. Mumbrella's Zoe Samios speaks with Nicholas Gray, chief executive of The Australian, on the newspaper's progress.

This week marked the first time since 2008 that News Corp’s national masthead, The Australian, turned over an operating profit – $13m in 2017 compared to 2016.

It was a milestone for the publication, especially since News Corp’s Australian newspapers had been written down by US$310m during the second quarter, bringing the value of its local mastheads to $US420m.

The Australian

The profit is a major milestone for News Corp’s national masthead

For Nicholas Gray, chief executive of The Australian, the newspaper’s success came down to three things: growing paid subscribers, marketing and focusing on a strong online presence.

The company, which quit Apple News’ subscription service just eight months into using the product, has now attracted just short of 100,000 paid digital subscribers.

Gray says five years ago there were “basically no newspapers” in Australia which charged for digital content: “The number one thing was focusing on encouraging people to pay for digital content. That’s been the biggest change over the last five years.”

He tells Mumbrella how The Australian, which celebrated five years of a digital paid subscription model last year, “led the way” in charging for digital content.

“That’s been about producing high-quality journalism everyday, particularly in the areas which we know are most important to our paid audience around politics, business and opinion, but also spanning a wide range of content areas from education, to the arts, sport and many others,” he says.

The Australian’s ‘For the informed’ brand campaign which launched earlier this year was another key driver of subscription growth.

The Australian’s campaign, which launched earlier this year

“Obviously our ‘For the informed’ brand campaign has told our audience, and potential audience, that if you want to be informed, you should subscribe to The Australian,” he says.

He adds the final factor in The Australian’s online success is focusing on having good content across its website, mobile site, through newsletters, strong social distribution and applications.

“Finally, you have to be wherever they are, so obviously the newspaper has been our traditional primary source of content,” he says.

“Whenever our audience are looking for our content, we need to find them and not assume they will always find us.

“Those have been the primary drivers and that’s driven a really strong growth in digital subscriptions which continues, and that has helped us with our advertisers.”

The Australian’s CEO Nicholas Gray with a group of his direct reports (L-R): Mitch Dawson – GM circulation, Gray, Alice Bradbury – GM marketing, Vaughan Cottier – GM sales, Stuart Fagg – GM digital product

Gray also expects the company’s new package offering for advertisers, the News Prestige Network, which launched at the end of June, will assist the publication’s growth going forward.

He says: “We expect it to have a contribution because we do think that prestige portfolio as a whole is greater than the sum of the parts, so it’s exciting to bring that group to market together.

“Certainly the idea that we have a premium brand positioning with our audience and with advertisers has been really important.

“You constantly need to be coming up with new ideas and new offerings to excite the advertising market and we expect it to have an impact.”

More recently, The Australian has invested in alternative models of storytelling, such as Dan Box’s podcast Bowraville and his upcoming vodcast series, The Queen & Zak Grieve.

Gray says the new initiatives are reinforcing the paper’s investigative journalism credentials and havehelped drive subscription growth.

“It’s helped. Clearly things like Bowraville don’t happen everyday. It’s not the bread and butter that’s driving subscription and traffic everyday, but what initiatives like Bowraville do is reinforce our investigative journalism credentials.

“It’s very important for our audience to know that when they get the paper, or open up our website, that they’re going to get journalism which been deeply reported, and not just a rehashing of press releases.”

The paper’s editorial is led by editor in chief, Paul Whittaker

He adds: “We want to do more multi-media stories, and we will. Things like that drive some subscriptions but they’re just as important for reinforcing our credentials.”

He also confirmed the company is still in talks with “tech titans” about developing “sustainable subscription models”, but there was nothing to report yet.

While subscriptions continue to climb for The Australian, a report from Deloitte earlier this week indicated just 10% of Australians saw the value in paying for news.

Gray argues it is wrong to draw “firm conclusions” from any individual report.

“My view is that we have proven every year that people will pay for our journalism online,” he says. “It’s a rapidly evolving market, but if you look at the impact of Netflix and Stan and Foxtel Now on the paid internet television market, you see a market that’s evolved very quickly with improved product quality and compelling offerings.

“It’s wrong to draw firm conclusions based on any individual report and I’ve seen research which says the number of people are willing to pay for news online is growing,” he adds.

“I’m optimistic more and more people will pay for quality news in digital over time.”

Gray says a paid content model is a good strategy for “premium content,” adding: “The Australian has some advantages in having an established national newspaper, a large group of quality reporters and the benefits of being part of the News Corp stable, but we have demonstrated if you put out high-quality deep product every day, the number of people who will pay for it and engage with it will grow.

“I’m not saying it’s as easy for every niche site to deliver that depth, but it’s clearly, particularly for premium content, the right model.”


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