The Media Guardian have today reported that City AM’s profits have dropped from £439,000 in 2010 to £20,365 last year, that’s 95%.
Take a closer look at the financial freesheet’s figures and I’m struggling to explain how City AM manages to only make a £20k profit from £8.6m revenue? But what about the future of print…
Since 1995, when the Metro was established in Sweden, over 300 free daily newspapers have been introduced in almost 60 countries, mostly in Europe. We know that the model is based on selling content to readers and access to those readers to advertisers and it is generally considered that newspapers are financially ‘healthy’ when up to 70% of their income is derived from advertising. Today’s figures show us that 90% of City AM is based on selling advertising space, and if you picked up a City AM you will see that it roughly has a 50:50 advertising to editorial ratio.
It is interesting to note that City AM increased spend can be part accounted for the investment in digital development of the paper. Without doubt, Virgin Media’s rollout of WiFi across the London Underground network will have a substantial impact on the freemium publishing model.
In March this year industry anaylst Douglas McCabe was quoted as saying that that the WiFi rollout would mean the publishing industry would: “… need to shift from a content supply and push model to a service model, understanding needs at different times of the day, which needs a different management mindset… ”.
Funnily enough in the same piece Lawson Muncaster, managing director of City AM, said that “people do not choose content because of the platform it is delivered through; it is selected due to the quality of the content.”
“Remember that in terms of mobility, there is nothing more mobile than a newspaper,” he says. So why the significant spend Lawson?
Perhaps he’s looking towards the Metro for digital leadership.
Back in August campaignlive.co.uk ran a feature on Matt Teeman, looking at how the Metro’s new Commercial Director is moving beyond the reliance on print advertising revenue (remember that 90%) and moving towards a brand designed to be consumed on the move at different times of day.
Print is not dead. Lawson is right, the portable nature of print means its still has great following and plenty to offer – IF (BIG IF!) it embraces real innovation. Print publications becoming web portals becoming social media outlets becoming twitter channels becoming virtual radio and TV stations – that’s the future Lawson – get on it.