"We play catch-up but have grand ambitions in digital," Andrew Mullins told day two of Digital Media Strategies, a conference taking place in London.
He said: "We have been waiting to see and following", explaining the group has "not lost money in digital" by taking this approach.
Mullins said the "digital strategy of the Evening Standard is video", referring to the company's successful bid for a licence to run a local TV station for London. Ofcom awarded the licence earlier this month.
He said the Standard's strategy "is to make money through producing video cost effectively", explaining that until now the title has been buying in video and not making money from it.
He explained that London Live would have cumulative losses of £15 million until it breaks even, a process which will take four years.
Mullins said the Standard and Independent have been focused on print rather than digital, and used the keynote speech to explain how both titles have found circulation increases.
Back in 2007/2008 losses at the Evening Standard were at £20 million, Mullins said. "The reality was people were not buying the paper."
He said the image of the brand was dictated by vendor boards, with headlines such as "'Bin Laden', 'floods' and 'cancer'".
"It was making people ashamed not proud of the city they worked in," Mullins said. "And they didn’t want pain, misery and disaster."
So the Evening Standard apologised. It launched an advertising campaign with posters saying "sorry". It was an attempt to "repair a broken marriage with Londoners", Mullins said.
The Standard "looked for the unique opportunity", Mullins said, explaining that was the commute home.
The focus was on making the editorial stance pro-London, renaming the paper the London Evening Standard. "We made it entertaining rather than depressing," Mullins said.
The Standard increased in circulation from 260,000 to 700,000. It reduced the number of distribution outlets from 9,000 outlets to 400. In October 2009 it stopped charging 50 pence and went free of change and put up ad prices from £6,000 for a page advertisement to £16,000.
The Standard’s solution to declining circulation and losses was was not to go digital, Mullins explained, adding that the approach resulted in a £1 million profit last year.
The Independent was also experiencing a circulation decline and Mullins was tasked with turning it around and growing the audience.
Mullins said experience had showed that "promotions don’t work, advertising doesn’t work, and bulks simply hid the decline".
The approach was to "find a product people want". Mullins's conclusion was that people wanted "weekday snacking”, a reading experience for the daily commute, the coffee break and lunchtime. He said that people wanted value for money and emotional news. So the team set out to "make people feel savvy and part of a community rather than editorial simply pushing out news".
In October 2010 they launched the i, priced at 20 pence.
Apart from a long feature or opinion piece, news stories are a maximum length of 350 words. Costs are kept low with a team of six editorial people re-subbing the Independent to create the i.
Mullins said that critics believed that people would ditch the Independent in favour of the new i. But consumers are segmented, he explained, and the decline of the Independent has continued at same rate.
Mullins said combined paid-for circulation of the Independent and i is now at around 300,000.
He said before the launch of the i the Independent had a 7 per cent share of the print market. The combined circulation of the Independent and the i is now at 23 per cent of the market, he said.
Following the London Live announcement last week, the Guardian reported that the company has told staff "it intends to make 'radical and transformational' editorial changes", including Independent and London Evening Standard editorial teams to be "wholly or largely located in the same newsroom, with some journalists working across both titles".
Correction: We initially reported that full page ad prices of the Standard went up from £6,000 to £1,600. We missed a 0. The rise was to £16,000.
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