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[upbeat music] Here's what's important. Nonprofit is not a business model. That's not what's important. What's important is are you mission-driven?

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[upbeat music] This week's episode of the Rebooting show is brought to you by House of Kaizen.

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We're all in pursuit of strong and consistent growth to make our media brands lasting businesses amidst the push and pull of revenue requirements, shifting audience consumption patterns and turbulence in the market.

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But what does good growth look like in this era of media and publishing?

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House of Kaizen has a growth diagnostic used by publishers and other recurring revenue products to identify and drive sustainable growth with audience-first experience optimization.

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Through their decades of working with the world's best subscription products, they know what creates sustainable net growth and what will help you find better alignment between your audience expectations and the product experience.

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I talk about this kind of alignment all the time. I actually sat in on a growth diagnostic workshop that the House of Kaizen had put together earlier this year, and I found a lot of value in it.

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I'm gonna apply its lessons when I come out with my membership program eventually. To find out more, go visit House of Kaizen at houseofkaizen.com/rebooting. That's Kaizen with a Z. That is K-A-I-Z-E-N.

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Thanks so much, Matt, Peter and the team at House of Kaizen for their support. [upbeat music] Welcome to the Rebooting Show. I'm Brian Morrissey.

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I'm joined this week by Steve Sachs, who's the managing director of The Guardian US. You've been there about a year, right, Steve? I have, yes. Yeah, I joined October thirty-first last year.

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I scared everybody walking in for Halloween on that day. Ah. What were you dressed as? Ah, that day. I was dressed as a business guy.

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That would have been really bold if you just showed up, like, in a hot dog, uh, costume or something the first day. [laughs] That's right.

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Dressed as the Oscar Mayer Wiener in order to address coming up at the Wienermobile. Here's our fearless leader has arrived. Exactly.

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In order to emphasize the importance of marketing in the media industry and how under-leveraged we are from that point of view. By the way, the Wienermobile is no longer called the Wienermobile. Did you know that, Brian?

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No. Yeah. Is that, like, a, is that, like, a problematic term? [laughs] Brand... E-exactly. Oscar... I, I forget what it's called. Hang on a second.

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I know this because one of my cousins is actually a Wienermobile driver. Was a, the Wienermobile driver this summer. But I forget what they call it now. Oscar Mayer is gonna be, gonna be either happy or unhappy.

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I'm, I'm a traditionalist. I would just... I'll probably still call it the Wienermobile. I mean, I still call Reagan Ai-Airport National, so- So, so- I don't think- So do I.

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Exactly, which- That's why if you saw today- They, they saw-... Business Insider- Yeah. They just changed Insider back to Business Insider, but I never stopped calling it Business Insider. So- There you go.

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There you go... I just, that's what I waited out. So what attracted you to the job at The Guardian?

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The Guardian was early with targeting the US market, and look, a lot of particularly brands in the UK, we share a language, maybe we're separated by it.

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We can argue about the S's and the Z's and all that stuff, but i- the US market is giant and deep, and particularly if you're in the news industry.

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The US news industry basically represents, like, half the global market for, I believe, for subscribers. Yeah. So you don't definitely need to go to Oxbridge. I guess it would help to be like, "You know what?

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We should probably expand beyond the UK," which is a nice size market, but it's not, it's not the US market. The US is massive. We're seeing a lot of UK brands try to make this leap.

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I think The Guardian has gone through, like, ups and downs, and it, it seems, and we'll get into that, that it's in an upswing because it's really difficult to make a mark in the US market.

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It's just a massive, deep, highly competitive market, and it might look good on a spreadsheet, but it's really difficult to break through in here. What was the opportunity you saw that attracted you to, to this brand?

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Yeah. Look, I've done a lot of work in for-profit media as a timing for, for a long time.

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Also done a lot of work in nonprofit media at the Texas Tribune, at places, local nonprofits, helped launch a, a nonprofit in Oakland, California. So I've done a lot of work.

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And when I looked at The Guardian, what I saw was a news organization that figured out how to serve an American audience in a way that nobody else was doing it and had built this big audience.

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I mean, the hard part about launching in the US is figuring out how are you actually different, like you said. Yeah. Like, how in a crowded market, what are you gonna do that's different?

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And The Guardian had built an audience of forty or fifty million people on Comscore a month. That's bigger than The Wall Street Journal in the US. Right?

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That's just US numbers for The Guardian, and bigger, almost as big as The Washington Post. It's two-thirds or seventy percent the size of The Washington Post.

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And so they figured it out, and what we figured out was that some people are looking for a global view on news.

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Some people are looking for coverage of the most important issues of our time, like race, democracy, climate. We're really good at breaking news, and so we're very fast at it.

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It's part of the kind of British DNA of us, and so we're very fast at getting breaking news out.

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We figured out how to build this big audience, but from both a revenue point of view and overall kind of presence in the US market, even in the media industry, we weren't really taking advantage of that big audience that we built.

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And I saw an opportunity to help take this incredible mission and big audience and build revenue and build presence in the US in ways that reflected the big audience that we had. Mm-hmm.

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And so it was an unusual opportunity.

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It's a mission-driven or- organization, no paywall, big audience that in the USFrom a revenue point of view, and even just from a presence point of view, I just saw big opportunities, and so I decided it sounds like fun.

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Yeah. Let's go do it.

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And the other thing was, it wasn't just that I saw the opportunity, but also the leadership, so CEO and editor-in-chief of The Guardian globally, as well as the board, had decided that they really wanted to invest in the US to continue to grow on our success, and that they would actually write a check to invest.

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[laughs] Yeah, well, that is the key- So big opportunity... because a lot of people see- Exactly, right? Big opportunity, and you get the resources, and that's great.

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I'll be honest with you, I'm, I'm going, I'm going to visit the UK in, in a couple of weeks, so hey, listeners, let me know, meet up for a beer, pint, whatever.

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And you see the opportunities in the US, right, if you're from outside the US, but the costs are massive. The opportunities are massive- Yes... but the costs are massive. And the problem with- Yes...

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this is just having covered over the years on the agency side, on the publishing side, I used to always see these hotshot, quote-unquote, "creative agencies" in the UK that would come to the US and go down in flames.

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And mostly it's just because everything costs more money in the US. That's right.

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Th- you need to invest way more than people even think that they need to do, and you end up getting caught in a, a situation, at least that I saw broadly, where if you don't spend enough, you, you, you don't have a shot at the end of the day, and you have to commit to it.

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And I see some publications are like, "Yes, we're going to take on the US. We've stood up a four-person operation." [laughs] Like, it's... You're not gonna. And it's hard because- But I think-...

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the, the economics are different coming from a smaller market. No, I think you're right. Look, I think that there's a few things.

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If you're gonna come into the US, which a lot of people are trying, the first place you need to start with is it's a crowded marketplace, what's your value proposition that's gonna be distinct in that marketplace?

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Mm-hmm.

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And most of the time people don't think that way, and so they end up coming in and you're not particularly appealing to the audience or advertisers or anybody else because you're not really doing something unique.

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Or it's- So that's the first question... or let's be real, like a lot of people think they're more distinctive than they are. That's just in life. [laughs] Yes, 100% true. That's 100, it's 100...

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You're 100% right about that. So that's the first thing.

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The second thing is, as you said, you then need to say, "Now I can figure out something that's distinct," but then to me the second question is, what's your business model? Sure.

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Just because you have something that's distinct doesn't mean you're gonna actually make it successful from a revenue point of view. Like, good luck selling subscriptions in the US marketplace.

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There is subscription fatigue, not just in news, but everywhere you look people are cutting back on subscriptions.

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And the advertising marketplace, especially given the way the ad market has been over the past year, is pretty tough to break into.

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So even if you figure out a distinct value proposition, what's your business model that's actually gonna make it in the US? That's the second question. Mm-hmm.

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And then the third question is, okay, even if you figure out those two things, are- you got enough capital to actually invest and build?

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One of the advantages of The Guardian, and part of the reason why I came here is, we figured out a distinct value proposition.

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We are independent, we are available to everyone, no paywall, on some of the most important issues of our time with a global view. That's a distinct value proposition.

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Number two, we've got a revenue model that's distinct also. In the US, we have this voluntary reader revenue model, like a nonprofit, like an NPR model.

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And in the US, we have built it so that it's now more than half of our revenue in the US comes from voluntary reader revenue or voluntary contributions under $1,000. And this year it's gonna be $33 million.

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So we figured out lead with that, and then you have an ad model that goes along with it. We actually have philanthropy also in the US, which we can talk about today too. Mm-hmm.

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And then the third part is, as you said, all right, so we figured out a business model that actually will work here. By the way, we didn't figure that out right away.

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That took a bunch of years, but we figured it out along the way. And the third part is the, the advantage of The Guardian is that we are owned by the Scott Trust.

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The only reason that we can do what we do is because we're privately owned by a trust whose sole purpose is to operate The Guardian. And so we're not at the mercy of quarterly Wall Street reports. Yeah. Right?

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We're not at the mercy even of a billionaire owner, right?

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[laughs] We are patient and long-term focused, and so we can invest millions of dollars in coming into the US and hiring the right staff, and being patient to build up to this. And so you need all three of those things.

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Right. Yeah. You need a value proposition, and you need a business model, and you need capital- Yeah... that doesn't say that, "Okay, I need a return in 12 months." Right.

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And so that's really a remarkable combination that has made us successful here. Yeah. For Americans in the audience who don't know about the, the Scott Trust, it is fairly unique.

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I believe it, it did arguably hold back The Guardian in some ways, uh, previously, uh, you could argue, because a- anyone who's met people with trust funds [laughs] can tell you that can hold you back.

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But I remember when I first came in contact with the voluntary, uh, reader contributions, I was like, "This is not a model." [laughs] You can't be, like, putting on a red suit out in front of the mall and ringing a bell.

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[laughs] Like, that's not gonna work. Voluntary contributions has worked. There are a lot of different ways- But-... and I feel a lot of times when...

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This has probably changed, but I think when we used to talk about reader revenue, first of all, you used to just talk about subscriptions, and when you're talking about subscriptions, you would talk about paywalls, right?

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And it was treated as- Yeah... an all or nothing, like most things in life. It's either on or off, black or white, et cetera.

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And then you got metered paywalls, and then you got freemium, and there's lots of different variations on reader revenue, right? And this is a variation on it.

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Explain how the dynamics of a voluntary contributions model- Yeah... is different than- Yeah... like, what NPR does, or- Yeah. It's a re- it's a really good question, and my answer to that is it's really no different.

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It's really if we were in the US, if we were headquartered in the US, we would be a nonprofit news organization, right?What are the characteristics of nonprofit news organizations, which I've worked with nonprofits as well as for-profit?

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Number one, they're mission-driven, right? Which we are. Number two, we are owned in a way that even though we're privately held, no employees have equity in the company. Number three, we operate at break even.

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We actually lose money, and then we have this endowment, that's the trust, right? Over a billion pounds, over one point two billion dollars that we then draw off of just nonprofit would with an endowment.

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And the reader revenue piece of it, what we call reader revenue, a organization like Chalkbeat or, or Texas Tribune or others call membership revenue, right? It's the same, it's the same thing.

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It's the same dynamics, where ultimately what happens is we make our journalism available to everybody for free, and then we ask for people to make contributions, just like NPR, just like an NPR affiliate would.

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They happen to do it mostly during campaigns time, like during campaign drive times. We do it throughout the year, and it's interesting to see. We are-- We've become very good at it.

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It is part of the DNA of The Guardian, and that's why we've become good at it. So it is not... This is not just a commercial function.

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This is editorial and commercial working together at The Guardian to generate reader revenue.

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And what we do is we ask for people at the end of every piece of content, or when you come to our site, or when you download our app, we ask for contributions, and we explain why, why it's important to support us.

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You tell me how many articles I've read, and that helps lend to it. Exactly. I'm like, "I've read thirty-eight." Exactly. [laughs] I was like, "Oh, okay." Exactly, right? Should cough up.

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And, and, and Brian, I have a question for you. Yeah. All right. So after thirty-eight articles that you read, have you made a contribution to The Guardian? I haven't yet.

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[on-hold music] So we're actually very good at it, and that's why in the US, fifty-five percent of our revenue is as a result of the small dollar contributions, and that's smaller globally.

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What, what's the average number for the contribution? That, uh, that's... I don't have the exact number in front of me for the average, but people are giving a combination of ways.

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So some people give a one-time contribution, some people give a recurring contribution monthly, and some give recurring annually, right?

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And in the US, it's still more one-time contributions, so it's maybe sixty, sixty-five percent of one time.

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Uh, we've increased the recurring now to, uh, to more than thirty percent on recurring, and we now have, in the US, over two hundred and fifty thousand recurring contributions just in the US.

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We actually just hit that number. So we have two hundred and fifty thousand people in the US alone who are recurring contributors every month. And so we're really good on our site at doing it. We also are good at email.

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We take advantage of the email channel, like others would take advantage for subscriptions.

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We are very good about using that also, and we've been built out our capabilities even in the past few months to remind people about the value that we have, and to ask them not just for that, but also for the future to help us support coverage of, of the war in Israel and Gaza, or because they love the recipe that we, that we publish, and they're using that to support The Guardian, and people respond.

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And it's actually, from my point of view, this is one of the things that has been great about the past ten years is that this model, which is effectively a nonprofit in the US, a nonprofit media model, which combines together reader revenue or membership, combined with advertising or sponsorship and philanthropy from institutions and individuals, has actually developed into a sustainable business model that has allowed not just The Guardian to grow, but has allowed hundreds of nonprofit news organizations in the US to grow as well, just launch and grow.

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If we're looking for some good news in the media industry, which we are looking for good news, [laughs] a piece of good news from the past ten years is that this model has actually developed, and it's sustainable, and is allowing the growth of new organizations and older organizations like The Guardian to grow in ways that the model ten or fifteen years ago just wasn't as sustainable.

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Yeah. And I, I wonder about the mo- because I now understand the mission of The Guardian and, and I can remember the comment is free, open journalism and the rest.

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And is the reader revenue model just the best option based on the quote unquote, "constraints" that The Guardian has? Because I wonder, like, how extensible it is.

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I know that there are experiments in pure nonprofit journalism. I just think it's unusual a little bit to ask... For instance, Vox asks- Yeah... for contributions to- Yeah... for its articles.

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And I'll admit, I've got a lot of friends at Vox, but at the same time, know how much venture capital you've taken, and, like, [chuckles] the rest of us are out there, like, selling. So, like, I'm not sure- Yeah, yeah...

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you know, maybe- Yeah... maybe you can just get Ryan to get the programmatic yield up instead of the contributions. Yeah. I don't know. Uh, do you see this as an extensible model, or is it always just gonna be niche?

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I do. I do. I think Vox is a good example, and I think Vox does a, a great job, and they are trying to build out this revenue.

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But I think the key to it is you really need to be through and through mission-driven as an organization. Mm.

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And that audiences can see that and support you if you are mission-driven, and if they think it's not exactly that, then they're less likely- Yeah... to support you.

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And it's not just from an audience point of view, it's also an internal capability point of view. It's a lot easier to actually spin this thing up.

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It's still hard work, but in order to do it well, you need to have a whole membership or reader revenue function-You really need to be mission-driven and focus on it as an organization, 'cause that's what it takes to actually make it successful, and more than just something that's a sideline.

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And so I think that it would be hard for profit media organizations to make this work. But it sometimes surprises people that in the US there are more than 1,500 nonprofit news organizations in the US. Yeah.

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There's all the legacy NPR affiliates, some PBS organizations have nonprofit news organizations also.

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There's an organization called the Institute for Nonprofit News, and they have over 400 members now, many of which were started in the past 10 years.

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And so I do think that this model is ascendable into many different places, including not just local nonprofits, but you look at an organization like Chalkbeat, for example, or ProPublica, or the Marshall Project.

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So these are big national organizations that are sustaining themselves very successfully off of the model.

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The model has the three parts that we talked about before, and the three parts are membership or reader revenue- Mm-hmm... sponsorship or advertising, and philanthropy.

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And that philanthropy can be from institutions like foundations or individuals who are giving not $5 a month, but maybe are giving $50,000 a year, or $500,000 a year on the high end, et cetera.

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In order to make it sustainable from my point of view, this model, you need to have some mix of all three of those.

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You can't be dependent on any one of them, because if you're overly dependent on philanthropy, someday the philanthropy might not be there, [laughs] right? And so you need to build out all three.

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If you're able to build out all three, I think this is a model that works very well, and we have all kinds of organizations in the ecosystem that are helping American news organizations build this model.

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So if you look at what American Journalism Project is doing, or what Press Forward, led by MacArthur Foundation and Knight Foundation, announced a couple months ago, a $500 million investment into nonprofit news.

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All of that is focused on helping build the ecosystem and build this revenue model in ways that I think will succeed. Not everyone will succeed. Yeah.

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There will be failure, for sure, but there's a lot of innovation and a lot of energy going into it, and I think this model does extend and will work with the help of the different organizations that I just talked about, really building the infrastructure and helping these organizations succeed.

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So can you explain the importance of nonprofit versus for-profit? 'Cause I understand, like, nonprofit, it's like a tax designation more than anything. Yeah, yeah. But is it... What do you see?

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I guess there's a brand element to that. I wouldn't think- Yeah... that most Americans would come to The Guardian and understand your tax status and the Scott Trust. No, no. Like, that's expecting a lot, isn't it?

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[laughs] Yeah, no, I 100% agree with you. Look, employees don't even understand it. Employees of The Guardian don't completely understand it, it's, 'cause it's complicated, so certainly average Americans are not.

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Like reading an article- Nonprofit-... like, "Oh, well, so I understand because they're the Scott Trust- Yeah, yeah, yeah... and they were founded in 1821- Yeah, yeah... in Manchester." No, no, no.

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Yeah, no, look, here's what's important. Nonprofit is not a business model. It is, as you said, it is just a, it's an IRS tax designation. Yeah. That's not what's important.

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What's important is what we were talking about before. Are you mission-driven? So at a for-profit company, your goal ultimately is profit, to make money, right?

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Or at a mission-driven organization, whether you have a 501[c][3] status, whether you have an IRS nonprofit status, or whether you're like The Guardian and you don't have it, but you're mission-driven, the question is you're not trying to maximize profit, you're trying to deliver on a mission.

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And that's the difference between the two. Is it mission first or is it profit first? And ultimately, The Guardian is mission first. So is ProPublica. Mm. Right?

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Even though ProPublica is a nonprofit and technically The Guardian is not. Is Texas Tribune mission-driven? Texas Tribune is mission-driven, yes. They are. Okay. As is the Baltimore Banner, right?

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The Baltimore Banner started to compete against the Baltimore Sun because the Baltimore Sun, owned by multiple owners over the past 15 years...

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Baltimore is my hometown, by the way, so I know a little bit about this, and, uh- I like Baltimore. One of the, one of the underrated cities, at least in the Northeast. I 100% agree with you.

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I was just there for the first time in years and had a great time. It is a great city that doesn't- It's overlooked.

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It gets between these, you know- So, no, more than overlooked, let's just face it, like The Wire was not- Yeah... like the PR team in Baltimore did not want The Wire to happen.

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The number of people I talk to that say, "Oh, you're from Baltimore? I love The Wire." Then you have Serial. That's not Baltimore. Then there was Serial. That's true, yeah. Not everybody likes it. That's true.

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You do have that too, yeah. Anyway, so all of them are mission-driven, and so what it means is that as an organization, you are operating off of delivering against your mission.

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And in our case, that makes a big difference because it means that, not just for our audience, but also even for advertisers, we're different because we are mission-driven, we are independent, we are bringing something that audiences really want, and we know they want, not just because of the number of people who come to us every month, but because they give us, in the US, $35 million a year.

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[laughs] Yeah. And so that makes us different even when we go to the ad marketplace and say we're a different kind of organization because we are mission-driven first. So this is obviously difficult.

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I mean, we're, we're doing this in Q4. It's been a [laughs] difficult year for publishers. I don't know. The ones I talk to- Yeah... I don't know, people are like, "Oh, you're cynical."

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I'm like, "I'm not cynical," but if you talk with people- No... like I don't... If it rains all the time, I can't tell you [laughs] that it's, like, always sunny.

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[laughs] And it's been a really difficult year, and for publishing in general, but news is disproportionately affected.

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And my concern is a lot of the changes going on right now, and I think the changes that are coming down the pike with search, social is already completely deflated.

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Search is starting to get very uncertain.A lot of publishers are relying on commerce operations that have never been under more threat.

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Google doesn't know what to do with all these commerce pages of gift guides and stuff, and they're trying to change things because of different forces with ChatGPT, and it might not even be that Google is trying to extinguish a lot of publisher businesses, but they might just do it by accident.

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[laughs] And I don't mean to laugh about it, it's just, it's a really difficult situation. And, you know, as I said, news is hard.

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So whether we're talking about subscriptions or if we're talking about voluntary donations, whatever- Yeah...

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it just doesn't seem reasonable to think even in a market as big and as lucrative and as deep as the United States, that there's enough to go around. Yeah.

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I do think that it has been a hard year in areas that you highlighted. There's also been a hard year in the ad marketplace- Well... in the US. Yeah, that too, right? I agree.

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It is gonna be tricky, and it's gonna continue to shake out overall.

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I think, I think I go back to what we were talking about at the top here, which is for the stronger organizations that have figured out something that we were talking about before you actually turned on the recording.

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We were talking about brands. That's where all the good stuff is. That's what I'm keeping for my own- Right. [laughs]... reader revenue strategy. That's right.

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If you, yeah, if, if you send Brian an extra $20, it can be by WebSummit. He had to bootleg. For $20 he can, he can have this stuff at the beginning- He had to bootleg copy...

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that he actually claims he didn't record it, but I know that someplace in here- Exactly... actually there was a recording on there. My iPhone was actually on the whole time. There you go. Exactly.

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So if you figured out a unique proposition that actually serves your part of the audience well, and you have a diversified model, so it's a mix, like we were saying, for us, I mean, mission-driven, it's a mix of reader revenue advertising and philanthropy.

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The Guardian in 2016 started the guardian.org with the purpose of supporting The Guardian's journalistic ambitions in really exciting areas like democracy and climate.

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We get about three or 4% of our revenue in the US from that, so we get a few million dollars a year- Yeah... contributions from major organizations like the Gates Foundation, for example.

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If you have that, then there's not quite enough to go around, I agree, but on the other hand, you have a diversified model that one thing can make up for another, and if you're valuable and unique, I'm optimistic that the strong will continue to keep going.

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I think the weeding out of the weak brands- Mm-hmm...

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right, the ones that just aren't relevant to people anymore, and somebody's operating them to operate them off of algorithmic play of some kind, you know, used to be off of social traffic. Those are gone.

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And even the brands that are just not as strong overall, that aren't as unique, I think those are gonna really struggle, too.

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But I do think that strong brands, including The Guardian and others, obviously, I think the Washington Post is gonna figure it out.

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They struggle right now, but $100 million gap is pretty hard to figure out, but I think they're gonna get there. Yeah.

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I think that because they have really strong editorial and a strong unique brand, I think they'll figure it out.

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I think that the strong ones will survive and others are gonna be pretty challenging, as you said, for sure. Yeah. The, the next year is gonna be rough. We're gonna see a lot of closures, I think- Yep...

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and a lot of- Yeah... M&A activity that's really just capitulation and handing over assets to others. Yep. No, for sure. No, it's like in the...

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I did some work in the startup world, startup tech world for a few years, and there's the acqui-hires, right? Where you're basically just acquiring the talent or you're just combining just to keep going.

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I agree with you. I think we'll see a lot of that- But I look at like-... in the next year... you know, a brand like Jezebel that... Look, this happens in digital media.

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The part that we did cut out before we were talking about my brands article, you're pushing back a little bit on it. That's okay. I like it. I take all notes.

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But I think Jezebel did have a strong differentiated brand in the market, and I think if it wasn't owned by a private equity firm, frankly, they couldn't do this model.

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But from everything I see, they actually do have a loyal audience, and they are differentiated, and they are mission-driven. And- Yeah... I think these kinds of models can work.

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I think for some publications they need to get out of the institutional structures that they're within, and you see what's happening with Defector. They're making it work.

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Are they building an operation the size of the Washington Post? No, they're absolutely not.

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But I think a lot of the future is being smaller and scrappier, and when people talk about, quote unquote, "solving the news problem," it's gonna be... In the United States, it's gonna be like how we do healthcare.

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It's gonna be a patchwork. It's gonna be imperfect. It's not gonna have complete coverage. Nobody's gonna be happy. Yeah, yeah. That to me is the most likely and- Yeah... and hopeful solution. Yeah.

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You're gonna have philanthropy. You're gonna have not-for-profit. Yes, someone will rationalize the newspaper chains. I'm actually doing a podcast tomorrow with Bridget Williams, who's incredibly smart.

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I've known her for many years. She's at Hearst Newspapers- Yeah... and she's making it work.

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[gentle music] So there's gonna be- Yeah, I-...

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a lot of different models. It's just- I totally agree. I think that, look, if you look at other models also, so when you think legacy newspapers, I agree, Hearst is doing some really interesting work.

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But you also look at things like the Chicago Sun-Times got bought by Chicago Public Media. Chicago Public Media is the owner of the NPR affiliate in Chicago. So that's pretty interesting.

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You've got the number two paper in Chicago that's been around for I don't even know how many years, 100-plus years- Yeah...

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that now is combining together with the local NPR affiliateIn ways that's an ex- interesting experiment about how do you actually build a revenue model that works for a legacy newspaper?

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Or you look at the Philadelphia Inquirer. The Philadelphia Inquirer- Yeah, Lenfest... is a nonprofit. Yeah. They convert it. It's owned by Lenfest, convert it to a nonprofit. This is an...

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Inquirer and Daily News have been around for- I know... you know, centuries, and yet now they have a- I grew up, I grew up with- Right... the Inquirer and the Bulletin. I'm old enough that there was three papers.

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Imagine that, we had three newspapers in Philadelphia, which isn't a massive city, at least in the US terms. Yeah, yeah.

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I actually went to college at Philly, and when I was there, the Daily News was still, and the Inquirer.

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There's an interesting experimentation that's happening with some of the legacy properties and with some of these startups. So, you know, I work on a startup in Oakland called Cityside, in Oakland, California- Yeah...

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where the legacy newspaper, the Oakland Tribune, Pulitzer Prize-winning newspaper, went out of business, and was shut down after it was bought by a PE firm. Mm-hmm.

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And so there was no high-quality news coverage in Oakland, an important city in the US. And so we launched a high-quality, nonprofit local news organization there, and it's working really well.

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So much so that just last week they expanded, they announced they are expanding to their third city.

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There's now Oaklandside, there's Berkeleyside, and there's now Richmondside, all three near each other, and it's a sustainable, great model.

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Ultimately, I think what you're saying is, I agree with, there's gonna be a mix of models overall. There will be some that would be more mission-driven, there will be some that will be more...

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The New York Times and others have done a great job at building out something that's more profit-driven. I'm optimistic ultimately about where we get there, but it's gonna be ugly along the way. Yeah, yeah.

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It will be, as you say, I think it'll be, it's gonna be a patchwork, but that's okay. Right. We're like reinventing here. Yeah. You know, we're reinventing, and so it's gonna be a patchwork.

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Well, people want simple, neat answers, right? And this rarely exists, and I'm hoping that the government will come and shake down Google or Facebook, and then hand over a pot of money.

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Like, first of all, if that ever happened, let me tell you, it's gonna be an insider's game, and the people who are gonna be- Yeah... first in line to get the money are gonna be the most politically connected.

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So if you're hoping- Yeah... for that, it's gonna go to [laughs] probably to people you disagree with because- Yeah... they're the most politically connected. Yeah. I'll leave that there.

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But I think that inevitably a lot of these solutions are gonna be imperfect. But one of the things that I wonder about, I wonder if you share any of the sort of concerns, is around news avoidance.

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And I don't mean it, like, in the news avoidance bad, I mean it more in, I think news avoidance is a completely rational decision by- Yeah... people to make. In my view, a lot of times there isn't enough introspection.

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There's a lot of focus on external forces that have been hurting the news industry, and there's not enough focus on what the news industry needs to do to improve their product to make it more palatable to people.

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The reality is, too much of news is doomerism. I am in the news adjacent business. I don't even know if I'm in the news business anymore. But a lot of stuff I don't really honestly want to engage in.

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It doesn't help my life. Yeah, yeah. It is more about cheering for one team against another team, and are things that I cannot affect, have zero effect on my life.

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It is about identity, and a lot of times it's about anger and feeling like my side is winning, or just being upset that my side is losing. To me, it's a lot like being a Philadelphia sports fan base.

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[laughs] Or Baltimore. [laughs] But a Philadelphia sports fan, it's different. Yeah. I think you're right, especially at the global and national level. Yeah. I think it's different at the local and regional level.

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There's not so much news avoidance at the local level because it's highly relevant to your lives. And also, the trust in local news organizations is higher than any other type of news organization overall.

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So what does that say? Well, it says that you're tapping into something that is helping someone, that's serving someone, that's helping inform them, and they want to read, watch, listen to it.

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And so at the national and global level, this goes back to understanding what do you do uniquely, and how are you actually helping people? Yeah. It's not just covering things.

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You actually need to understand what are you providing to people that is helpful to them, that they wanna know?

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I think that if you're not thinking about it from what's your unique value as an organization, I think it's hard.

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If you're just covering what's important, a lot of people won't agree that's important, and I think they will tune it out. Yeah. So it's 57% is reader revenue now- Yeah... in the US.

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And how does that compare to the global numbers? The Guardian's also in the UK, but also has an Australia operation. Yeah, yeah. So The Guardian globally is really... It's pretty interesting.

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So Guardian has grown over the last 10 years for two main reasons. One is that we got really good at reader revenue, and the second is that we got really focused on growing outside the UK.

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And so globally, about a third of our revenue globally comes from digital reader revenue.

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Now, one of the reasons why that's a little lower is because we actually still print a newspaper in the UK, and so that's not included in that number.

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We still do it because, just like here in the States, there are UK- And people pay to get it. But people- Let me ask you, so why don't you just do that online? I don't understand.

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Why does everything have to be free online? Yeah. I assume you charge more- Well, I mean-... than it costs to print. I... Yeah. For...

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We charge more, uh, digitally than what would it cost to print or it costs people for a subscription. No, I mean for if I'm getting The Guardian newspaper in the UK, I would- Yeah...

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be paying more than it co- You pay for it. Yes. Sure. Yeah, you have to pay a subscription for it. Yeah. But why not just- Yeah, ultimately it's expensive. You have to print, you've got to deliver. I know that.

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In the UK, actually, in the UK a lot of people still go to a newsstand to buy it, and that's just the tradition that they are, but a lot of people now are subscribing, too. It's expensive.

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We do pay for it, and it's still profitable for us in the UK. That's why we still do it, just The New York Times or The Washington Post- Sure... still has a print paper because it's still profitable for them.

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But to answer your question-It's about a third of revenue globally for The Guardian is from digital reader revenue, and that's one of the reasons why from very small numbers- Hmm...

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10 years ago, we've built it to something very significant that's helped us grow.

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And the other piece that's helped us grow overall is that 10 years ago, a very small percent of our revenue came from outside the UK, and now over a third of our revenue globally comes from outside the UK, with, with the US being the most important part of that.

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Because of those two things that we've done, we have been able to grow our team, hire globally and hire in the US.

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We've hired dozens of people this year in the US because of the growth of reader revenue, and because The Guardian is strong globally because of these two things that we've changed over the past 10 years.

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So but in the US, this is always the challenge. You've what? Like a little over 100 in editorial in the US? Yeah, we have a little over 100 in editorial and about 50 people in- Yeah...

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on the business side, so about 100, a little more than 150 people in the US now. We've grown it by about m- more than 40 people this year alone in the US. So what areas do you pick to win at?

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Because I wonder about how- Yeah... you rightsize the mission in some ways because The New York Times- Yeah... is rolling out like 1,000.

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Like, I don't think The Guardian is looking to be people's number one news read, I think, in the US or is- Well, right. So where do we look to win? Yeah.

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All right, so number one, we are a global perspective, and even though we only have 100 journalists in the US, we have more than 900 globally.

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And it turns out that one of the interesting things about our model is that for people in the US, more than half, for audience in the US, more than half of the stories or content they read or watch is actually produced outside the US.

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Yeah. Right? And so we're taking advantage of the 900 journalists all over the world, and more than 50% of what Americans want is actually produced elsewhere. And so that's a place where we win because we're so global.

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We're bigger in other markets outside the UK than The New York Times or The Washington Post is in markets outside the US. We're a very global organization, and that actually benefits us in the US.

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That's one thing that we win at. We also win on coverage of particular topics, climate, democracy. We're very good at those issues.

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We're very good, as I mentioned a little bit earlier, at breaking news, and so people come to us for breaking news. And then also we win because of our unique model, where, where we don't have a paywall. And so we're...

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People come to us because we don't have a paywall. We're really good on Apple News also. Like, we do really well on Apple News. Why?

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Because we have high-quality journalism that's covering US and global issues that doesn't have a paywall, and so we do really well there.

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And so that's where we traditionally have looked to win and where we have won, but what we're doing now is... So we've got 40 to 50 million uniques a month, and what we're focused on now is not growing that audience.

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What we're focused on is getting that audience to come to The Guardian more frequently, to become more loyal. Why is that?

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Because we know that frequency is the number one thing that drives someone to take out their credit card and make a contribution.

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And as I said, that's what we're focused on as an organization, is getting people to support us. So how do we get people to come to The Guardian more frequently?

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Part of it is that we have expanded this year some of the coverage that we're doing in the US that we've never done before. That actually we do in other parts of the world, we've never done here.

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So for example, we just launched a few weeks ago, Well Actually, which is our wellness vertical, so we're doing wellness coverage now because we know that people who come to us for some kind of breaking news or coverage of climate might also be interested in wellness-related content, especially because we put a unique spin on it, which is it's not just about wellness, it's also wellness that's aligned with your values of being climate conscious.

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And so it's not just throw away products and buy more products, it actually combines that, um, as well. We also have launched an investigations team in the US. We're well known for investigations globally.

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We've never had an investigations team in the US. We just hired and launched an investigations team in the US.

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And then the third thing that we're doing is we are broadening our content in other areas other than wellness, so we're other lifestyle areas, including sports.

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So we launched in August soccer coverage where we are the best at what our home, uh, headquarters would call football, what we call soccer. Yeah.

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We're the best in the world at it, but we've never covered it in the US, and so we are packaging together now for US audience our coverage of soccer from Europe with American coverage- Yeah... as well.

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So- So you gotta pick your spots and you gotta figure out the areas in which you have leverage. Exactly, yeah.

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You have the leverage of having a point of view from the UK and also elsewhere that is different than- Exactly... the very US-centric viewpoints that- Yeah... we get. Yeah. And I think people are more...

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I ca- I have no data to prove it, but I think people are more curious about the rest of the world because there is more divergence, and I, I feel like a lot of times we look at what other countries generally think and we're like, "Oh, that's strange," and stuff like this.

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But I'm just like, they- Yeah... they're looking at us- Yeah... and thinking the same stuff. Totally. Totally. Definitely.

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And I think there's more people who are curious about getting out of the US bubble than there were before, 'cause I think it's very easy to be so US-centric when you're operating and living in the US.

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I always tell my friends from other countries this, like, this place is so massive and big. That's the only reason that people don't focus on the rest of the world, 'cause there's just so much here.

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It's just like a lot of the businesses, the US publishers, for instance, are not rushing, there was a little period of that, into, to try to crack international markets as much- No... as they used to be- No...

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because it's like-It doesn't make any sense. This is a country of three hundred and forty million people. It's massive. Just win more share here.

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It just doesn't make sense to try to compete on someone else's turf when it, they're, they're smaller.

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Yeah, no, that's to- that's totally true, and so that gives us an advantage because The Guardian can go and grab US share by doing something unique, but also we just launched a European edition, right?

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And so we put another dozen journalists on the ground in Europe because we have an incentive to go and figure out other markets where you're right, in the US, like US publishers are, it's such a big market here that they don't have to do that.

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But then we bring this unique mix here, and it's worked well. Yeah. I mean, I can remember Huffington Post Greece, Huffington Post Polska. There was, like, all of these- Yeah... Huffington Post out. If anyone- Yeah...

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I don't know if anyone at Buzzfeed has checked on any of these in any time, but [laughs] I don't know, think that- [laughs]... they still are going concerns. I think BI still has a couple. Yeah.

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Yeah, I actually, I didn't even, I didn't even know that. But yeah, they- So I never, yeah... I think it was because Arianna Huffington wanted to- Yeah... put a flag in every...

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So she was going around the world putting the flag, doing the ribbon cutting. Yeah. And there were others that went in that direction because of ownership reasons and stuff.

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BI was always very curious, but there was- Yeah, that's true. Yeah... a German version- Yeah... and, and others. Yeah. But it's hard to pull off, and a lot, most US- It's really, it is...

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publications are just like, "Let's just- Yeah... try to figure this out."

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But, like, as you said, broaden the aperture, and you start think about all of nonprofit ecosystem that is developing is actually fairly big and robust. It's a silver bullet.

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There's no silver bullet, but I think it's at least promising.

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Yeah, I really think from my point of view, there are a lot of things to be depressed about in the US media world right now, but one of the things that gives me some hope is this model, that the fact that there's hundreds of small, but some growing really quickly, news organizations that have been started in the last 10 or 15 years off of this model, some of which aren't gonna make it, but a lot of which are.

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Where else in the news ecosystem can you say there's hundreds of startups that are happening, that are serving people in new ways, and the only reason it happens is because of this model?

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And there's a lot of work that needs to be done to get there, but it gives me hope. I'm actually optimistic about this among the raging fires of the news ecosystem in other parts of the country and the world. Okay. Cool.

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Steve, thanks so much. I really appreciate you taking the time. Yeah, Brian, yeah. Great to talk to you. [upbeat music] Thanks for listening, and thank you to Jay Sparks for producing the Rebooting show.

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If you have a podcast that you're considering making, you should check out Podhelp us and what Jay can do for you. Go to podhelp.us.

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[upbeat music]