A&N Media aims to grow digital to a quarter of its revenue by 2016, by adding a range of new subscription options and tilting away from advertising alone.
“We need to reinvent our approach and our business model,” A&N CEO Kevin Beatty told analysts at DMGT’s investor day on Monday.
Today, A&N has moved from having 98 percent of its revenue in print to having 12 percent from digital. Like some other publishers, it wants to reduce its reliance on print advertising. “We will build more stability in to our products,” Beatty said.
A&N won’t get there by wedding itself to paid content, however. “We’ve not adopted any ideological beliefs in terms of paid versus free and remain open,” Beatty said. “Mail Online newspapers’ iPad edition is released next week … with our iPad edition, we’ll be trialling both paid and free models.”
The publisher has previously said the Mail Online website will remain free whilst it pitches its growing audience scale to advertisers.
A&N’s advertising dependence has already fallen from 70 percent to 60 percent in the recession. Now, Beatty wants it to hit just 50 percent by 2016. “A lot of our digital growth is going to come from desktop and software and services products,” he said.
1 / 6A&N Media revenue profile
2 / 6Mail Online traffic growth
3 / 6A&N Media ARPU
4 / 6Mail Online in global traffic
5 / 6A&N Media consumer touchpoints
6 / 6A&N Media print advertising
Mail Online has rocketed to a “meteoric” 56 million monthly unique visitors (January 2011 ABCe) – second only to NYTimes.com (NYSE: NYT) amongst global news sites monitored by comScore (NSDQ: SCOR). “There is significant future potential,” Beatty told analysts. “But we remain very much focused on topline growth rather than profit (in digital).”
The site recently hired U.S. editorial and sales staff, something which will “open up categories of advertising that we just can’t get to in the UK; for example, medicine”, Beatty said. In advertising, “our focus is increasingly on providing subscription-based products like software solutions”.
In the six months to February, A&N Media’s revenue from its digital-only businesses (the former Associated Northcliffe Digital) rose nine percent from the previous year’s corresponding period.
The publisher credited “the continued strength of the recruitment and property companies”, but its travel and car classifieds sites turned in lower revenue.