Times Newspapers Ltd (TNL) has reported an operating profit for the first time since 2001, as digital subscribers to The Times and Sunday Times continue to grow.
The £1.7 million operating profit for the year ending 30 June 2014 represents a huge turn around on the £72m loss the company reported before the introduction of a paywall in 2010.
"Getting to a profitable and sustainable status is the product of an enormous amount of work," said News UK's chief marketing officer, Chris Duncan, on announcing the figures in London today, "and addresses the move to subscription and how we are going to get paid in the digital future."
The numbers show total paid sales, combining print and digital, increased by 3 per cent to 545,000 at The Times since October 2013, but dropped by 2 per cent to 958,000 at The Sunday Times. Digital subscriptions to both increased.If people believe they can read the same thing for free versus paying then you will see mass migration to the free modelChris Duncan, News UK
News UK's decision to pursue a "membership" model for readers – comprising half of The Times' total paid sales and a third of The Sunday Times' – puts them on a separate path to many competitors, who largely operate a fully- or partially-free model on digital.
"I think the narrative of a wholesale movement into digital is really a factor of pricing," said Duncan. "If people believe they can read the same thing for free versus paying then you will see mass migration to the free model.
"But if you say to people 'we value our journalism at this price, how would you like it?' then you will see people sticking with the format they prefer."
Emma Tucker, deputy editor at The Times, described 2014 as "a very big year for news" in terms of the stories broken at the outlet, with today's figures representing a "vindication of the [paywall] policy".
And Martin Ivens, editor of The Sunday Times, described his publication as a "news-breaking machine" with the year's big stories including corruption in the World Cup bidding process and campaigning for an end to modern day slavery.
But in terms of the number of people reading such stories, TNL publications still fall far behind their competitors.
The most recent figures from the Audit Bureau of Circulation show the other UK titles like the Mail, Guardian, Telegraph and Independent receiving daily digital readers in the millions, whereas TNL digital editions have yet to reach 100,000.
Duncan said the difference was in the level of engagement among those readers. Browsing visitors to other sites may stay for minutes or seconds, but the average reading time on The Times' digital edition is 47 minutes on weekday mornings and upwards of an hour for The Sunday Times.we're not going to design our business to suit the Facebooks of the world. "We don't find that it's something that creates value in digital journalismChris Duncan, News UK
"That is an immersive reading experience," he said. "That is time people are spending with our titles and taking stock of what we've written, it's not the same as dipping in and out of the website experience."
When many people have a number of news sources online, News UK is pitching itself as the "premium news provider" that people are willing to pay for, said Duncan.
And where many modern news organisations increasingly focus on social media as a distribution model for their journalism, he said News UK is not "going to design the business just as a broadcast medium to help other people distribute our content and monetise it."
"We're not saying it's not something we don't use," he said, repeating the publishers stance on social media given on the recent release of The Sun's digital subscription figures, "but we're not going to design our business to suit the Facebooks of the world.
"We don't find that it's something that creates value in digital journalism."
With the outlet having recently signed a 30-year lease on the News UK building in the shadow of the Shard at London Bridge, director of communications Guto Harri said the publisher "intends to stick around – that's our timefram – and we're encouraged by these figures".
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