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Digital transformation works, diversification less so

By Greg Piechota

INMA

Oxford, United Kingdom

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Today, I am benchmarking the financial performance of news media firms worldwide and checking on friends in Ukraine.

If you have questions or suggestions, e-mail me at greg.piechota@inma.org or meet me at the online Subscriber Acquisition Master Class in November.

INMA Benchmarks: Digital transformation is paying off for news media companies

The higher proportion of digital revenue, the greater growth in media companies’ total revenue and the greater operating profit margin in 2023, INMA research finds.

The news business remains mostly funded by consumers and advertisers, as diversification efforts seem to have had limited impact on revenue.

This is based on the analysis of 2023 publicly available financial reports and regulatory filings of 43 news media companies or news divisions of groups that are corporate members of INMA.

The median news company saw 51% of revenue from digital activities in 2023. The best performing 25% of companies saw 60% digital revenue, and the worst performing 25% saw 32% digital revenue.

We found the proportion of digital revenue correlated with the year-on-year change of revenue in 2023, as well as with the profit margin (EBIT).

State of media finances: In 2023, the median news media company maintained the total revenue at the 2022 level. That was a tough year with the rising energy costs, living expenses, ad spend volatility, and continued print decline.

The best performers grew revenue by 3%, and the worst saw a 3% decline. Among the fastest-revenue growing INMA members were: The Hindustan Times in India (14% growth in the total revenue year-on-year), Ekspress Group in Estonia (14%), Postimees (9%), Dow Jones in the United States (7%), and Prisa (media unit) in Spain (7%).

The median operating profit margin declined 1 percentage point year-on-year to 6%. Among the most profitable INMA members were: Nine (publishing unit) in Australia (29% profit margin), DC Thomson in the U.K. (26%), Alma Media in Finland (24%), Dow Jones (23%), and Telegraph Media in the U.K. (20%).

 

Funding sources for journalism: In 2023, the median INMA corporate member was mostly funded by consumers, and 49% of revenue came from print or digital circulation of content. 

The best performers saw 57% revenue from consumers, and the worst performers, 41%.

Advertisers were the second key source of revenue for news media, with 40% of total revenue for the median company coming from advertising in print or digital. 

Despite many years of efforts to diversify beyond reader or ad revenues, the median INMA member saw only 11% total revenue from sources other than consumers or advertisers. These other sources included events, printing services, logistics and delivery, syndication and licensing, marketing services, or e-commerce.

Growth strategies in news media: The growing news companies explain in their reports how they balance investments in digital products and services with the cost control and restructuring of legacy operations.

They invest in brands and content quality. Despite moderate success of diversification efforts, they look for new business lines and partnerships. 

They also expand into new areas through acquisitions.

Interested in benchmarking with INMA? Check our subscription services, or e-mail us for a demo: benchmarking@inma.org.

Resilience under fire: Ukrainian media’s battle for survival and truth amid the war with Russia

In the midst of war, Vitaliy Sych, editor-in-chief of The New Voice of Ukraine (NV.ua), faces daily air raid sirens, power outages, and the strain of managing one of the largest media companies in Ukraine.

 

As NV adapts to survive amid a devastating conflict, Sych remains candid about the personal and professional toll the war has taken on him, his team, and his country. 

Despite the fatigue that has gripped Ukraine and diminished global attention, NV’s audience has surged, as did online subscriptions, driven by demand for independent journalism.

We met on a video call. Sych connected from his home Kyiv, the capital. He wore a T-shirt with the text: “Good to be free men.” During the call, his electricity went off.

INMA: Vitaliy, how are you doing?

Sych: I am tired. Every day, I hear air raid sirens, and then I check in an app what’s coming, whether I need to run to the shelter in the basement. I live on the 20th floor, so when the electricity goes out, there is no elevator.

I am stressed about my children, who are at school right now, and about my employees on the front lines. At our company, 22 men have been drafted into the army [out of 100 employees]. Others fear they might be called up next. The war is very intense: artillery, drones, missiles; the risk of dying is high. 

Everyone is tired of this war, but there are different levels of fatigue. A Polish friend recently suggested we go to the French Alps for a holiday. I reminded him that, as a man between 18 and 60, I’m not allowed to leave Ukraine. 

His response? “Oh, the war is still going on? I forgot.” 

That fatigue is widespread. It reminds me of the Israeli-Arab conflict — after the first year or two, it’s no longer front-page news. It’s not that people don’t care; one can only stand bad news for so long before one switches off.

INMA: How’s the business?

Sych: Our media company, NV, has had to adapt in ways we never imagined. In the first month of the war, in 2022, our revenue fell to 20% of our costs. I thought we were done. 

Thankfully, we managed to find support from international donors, including individual publishers: Estonians, Czechs, Germans, and eventually Americans.

Our traffic exploded. Our online radio audience grew from 1 million to 9 million monthly users today, as people sought real-time information. We never took a day off, even on weekends. Our news site now has 13 million unique visitors each month. 

We had to cut salaries and reduce our team, but things improved. Advertising came back, albeit not to pre-war levels. Readers are ready to pay for online content. We make money with events. We even relaunched a printed magazine.

While we still rely on international grants, we’ve managed to bring our dependence on them down to about 10%-15% of costs.

Of course, we are also facing immense pressure as journalists. 

INMA: What pressures?

Sych: Russian propaganda is sophisticated and massive. The entire Russian media apparatus is essentially a department of the Ministry of Defense. 

Ukrainian media also have their challenges. The government tries to control the narrative and demands more positive news, but people know the reality isn’t rosy.

It’s difficult. We’re journalists, but we’re also citizens. There’s a line we walk, knowing that we’re at war, and sometimes we refrain from highlighting every negative development. 

At the same time, we remain critical where it’s necessary. Investigative journalism is alive and well in Ukraine, and we continue to expose corruption.

INMA: What keeps you motivated?

Sych: Maintaining hope is hard but necessary. When the Ukrainian army has successes, morale goes up. When things are tough, people get exhausted. 

You also need personal rules. I try not to consume news non-stop, even though it’s my job. My wife tends to get more pessimistic, but I remind her that, as [Israeli president] Shimon Peres said, “Pessimism is a waste of time.”

INMA: How can we help?

Sych: Keep reporting on Ukraine. Without your presence, we wouldn’t be able to influence public opinion in the West, which is crucial for continued support.

I am grateful for the direct financial support we had received in the beginning of the war. I would love to see more collaborations — perhaps Western outlets could put up donation banners or feature our English-language content. 

Even small contributions make a big difference.

You can contact Vitalyi Sych directly at VSych@nv.ua.

Disclaimer: INMA’s Greg Piechota is a member of the advisory board of The New Voice, alongside editors of Die Zeit in Germany and Dennik N in Slovakia, and U.S. scholars and former diplomats. 

About this newsletter

Today’s newsletter is written by Grzegorz “Greg” Piechota, INMA’s researcher-in-residence and lead for the Readers First Initiative. In his newsletters, Greg shares original research, analysis, and best practices in growing reader revenue.

E-mail Greg at greg.piechota@inma.org, message him on Slack, or meet him at the online Subscriber Acquisition Master Class in November.

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