The Guardian making most of its money from reader contributions
The Guardian Australia has managed to make over half its revenue from reader contributions, despite not operating a paywall.
According to the company’s ASIC filings for the 12 months to March 31, as first reported by Capital Brief, 55% of the $42 million generated in that period came through reader donations and subscriptions. Revenue jumped by 9%, from $38.6 million in the prior 12 months, with the publication turning a $1.7 million profit.
The Guardian’s funding model is unusual: it doesn’t paywall its content, however stories are tagged with regular reminders of this generosity, with prompts to consider an all-access digital subscription (which removes advertising); a running count of how many Guardian articles a reader has accessed (for free) in the past year; and a list of reasons why “one of the Guardian’s greatest assets is its reader-funded model.”
Reader funding means The Guardian is “not beholden to the political whims of a billionaire owner”. It means the editors “don’t have to chase clicks and traffic.” Most importantly, it means the website isn’t paywalled.
According to the publication’s own messaging, just 2.4% of regular readers are contributing. It pushes readers to commit to a monthly contribution — but stresses “we value whatever you can spare” — and also relies upon a number of philanthropic grants – and, of course, advertising.
Despite the small percentage of the audience opening their wallets, reader subscriptions brought in $15.3 million during the 12 months to March 31, a $3.4 million lift from the prior year. One-off donations dropped by $500,000 – now sitting at $7.7 million a year.
The Guardian Australia is free – but reader support is responsible for most of its revenue.
The Guardian’s business model is baked into its history.
The Guardian Australia is part of the Guardian Media Group, which in turn is owned by the Scott Trust. This trust was set up in 1936 by John Scott, son of the longtime editor and owner CP Scott, to “secure the financial and editorial independence of The Guardian in perpetuity and to safeguard the journalistic freedom and liberal values of The Guardian free from commercial or political interference”.
The trust was turned into a limited company in 2008, with the same protections for the Guardian “enshrined in its constitution”, according to the publication. There are no shareholders in the Guardian, aside from the trust, and all profits are reinvested into the publication.
Despite the tired adage that information wants to free, for a growing number of Australians, trusted information is clearly worth paying for.
Nine’s paywalled mastheads have also flourished, despite open-walled competition from major news publications.
At the company’s AGM last November, chair Catherine West announced that an uptick in digital subscriptions has pushed its total subscriber numbers across The Age, The Sydney Morning Herald, and The Australian Financial Review past the 500,000 mark.
News Corp Australia also saw a rise in its digital subscribers in 2024. According to the company’s financials, issued in February, paid subscribers for The Australian and The Daily Telegraph sat at 979,000 at the end of 2024, up from 940,000 in 2023.
Crikey’s editor-in-chief Sophie Black declared in a newsletter send out last month that 98% of the publication’s revenue comes from subscriptions, which she said “means we stay independent and free from big money advertisers (read why we’ll never take gambling money).”
Schwartz Media, which operates The Monthly and Saturday Paper, both paywalled online with a print version available to buy, believes in the user-pays model.
“Reader revenue has always been central to Schwartz Media’s success,” the company’s CEO and editor-in-chief Erik Jensen tells Mumbrella.
“Readers are invested in the quality of our journalism and are willing to support it.” While the company declined to reveal its exact subscriber numbers or the revenue earned from them, Jensen said: “We experienced strong growth during Covid and have experienced subscriber growth every year since.”
The bellwether for digital subscriptions internationally remains the New York Times.
The paper turned around a failing business model in March 2011 by becoming one of the first mainstream news outlets to charge for its digital content. At first, this was met with mass resistance, despite more niche publications like The Wall Street Journal and Financial Times having already implemented a similar paywall.
The New York Times pioneered the general news paywall.
A national online longitudinal survey, conducted in 2012 by academics at Pennsylvania State University, found that for the New York Times, “framing the paywall in terms of financial necessity moderately increased support and willingness to pay”, while positioning the move “in terms of a profit motive proved to be a non-compelling justification, sharply decreasing both support and willingness to pay.”
Twelve years after this study, the New York Times’ gamble has been an unqualified success. In the fourth quarter of 2024, the publication had 10.82 million digital-only subscribers, up from 9.7 million a year earlier.
It dwarves paid digital subscriber numbers for The Washington Post (2.5 million) and The Wall Street Journal (3.8 million). It has a larger paying audience than every single site on Substack, which boasted more than 4 million paid subscriptions at the end of 2024 – with political blogs being the biggest-earning category.
The 2012 study seemed to hit upon the reason readers are willing to pay for quality journalism, even when the information wants to be free.
“Results suggest that people react negatively to paying for previously free content,” the study noted, “but change can be facilitated with compelling justifications that emphasise fairness.”
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Cute, but ask anyone under the age of 45 do you watch FTA..?! “Whats that?”
The reported number for News Corp Australia would include subscriptions to Courier Mail, Adelaide Advertiser, Herald Sun, Gold Coast Bulletin, Cairns Post, etc etc as well as The Australian and Daily Telegraph.
It would also count corporate and student accounts, where large scale licenses are sold to universities at nominal cost and provide a significant bump to volume.
But lets be real – do more than 1 in 20 adults in Australia subscribe to a News Corp publication?
The Nine number is – I reckon – vastly inflated. Maybe something to do with their new uni partnerships or corporate subscribers, but the number of direct subscribers at end of FY24 was less than 400 thousand.
Mind you, can you trust news organisations not to spin those numbers? Hmm….
As I understand it, NYT bought a number of adjacent properties such as a word/number game, food sites and perhaps some others which have fed its subscriber growth more recently. 2012 seems so long ago. Small note, when I tried to unsubscribe a few years back they made it inordinately difficult – a problem ultimately solved by just blocking payment.
Curious for your take on the outsized increase of YT subscribers at The Benny Show
Telling me you have 900K subscribers is like radio stations saying they have 10% share. It’s funny numbers to inflate performance.
Wanna bet a good chunk of those are on those umpteen $1 for your first three month deals then cancel a month or two into their full price sub?