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The Daily Telegraph has stopped giving away bottles of water with copies of its newspaper at branches of WH Smith, as the company focuses on selling website subscriptions rather than shoring up sales of its print product.
The decision, which ends the routine of Britons being offered a copy of the broadsheet when they buy a drink at the high-street newsagent chain, was confirmed as Telegraph Media Group revealed pre-tax profits fell 94% from £14.3m to £900,000 last year.
Nick Hugh, the chief executive of the Brexit-backing newspaper group, said advertisers were tempted to hold back spending due to Brexit but it was also driving more readers to the company’s sites in search of news.
“For us as a business, obviously the main challenge isn’t from Brexit itself, it’s from the uncertainty. The number one requirement is that there is certainty about what happens. Equally, that uncertainty is not unhelpful from a reader perspective,” he said.
Hugh also said the main concern was increasing the number of paying subscribers to the company’s digital offering rather than keeping the print circulation artificially high with promotions.
The Telegraph said it had 400,000 paying subscribers across print and digital, although independent circulation figures suggest fewer than half of these are from the company’s digital subscriptions. This suggests the audience for much of its website content behind a paywall is only reaching a couple of hundred thousand readers, at a time when print circulations continue to fall heavily.
Hugh pointed towards the growing number of people registering free of charge to read a limited number of articles, which allows more targeted advertising and potential digital subscription sales, despite concerns over whether users are signing up with their real details. The former Yahoo executive, appointed to turn around the Telegraph in 2017, said he would increase the paying subscriber base by 25% this year.
Hugh also said the company benefited financially from having a clear identity as a rightwing news outlet under the Daily Telegraph editor, Chris Evans.
“The fact that Chris and the editorial team have a clear opinion and clear perspective that is right-of-centre allows to focus our commercial efforts. That’s what we have been about for a long time and will continue to be,” he said.
The company’s accounts, which were filed two weeks after the legal deadline for undisclosed reasons, show that in 2018, the group’s overall revenue fell 3% to £271m at a time of decline in print advertising revenue, while staff costs grew substantially.
Hugh said the company had invested in hiring about 80 journalists in the past two years, although many long-serving employees have taken redundancy and production staff have been outsourced. Newsroom sources report improved morale following years at rock bottom during multiple redundancy rounds, while the company has won plaudits for giving all its staff six months’ paid parental leave.
The financial returns next year will also be bolstered by the absence of the £275,000-a-year salary paid to its former star columnist Boris Johnson, while he takes a leave of absence from the Daily Telegraph to serve as prime minister.
The outlet is owned by the Barclay brothers, reclusive Brexit-backing billionaires whose advancing ages have led to continued speculation – despite their denials – that they could be looking to offload their media interests in the Telegraph and the Spectator.
The City analysts Liberum recently suggested the Daily Mail’s owner, DMGT, would be a natural purchaser for the Daily Telegraph because “politically and demographically, there is a similar profile between the two papers”.
Hugh insisted he had not been involved in any discussions about the Telegraph being up for sale.
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