Yahoo Finance Daily Telegraph Expects Big Tech to Fund Newspaper Earnings
(Bloomberg) -- Telegraph Media Group Ltd Chief Executive Officer Nick Hugh is counting on Silicon Valley to pay the British newspaper for content, which could boost growing earnings.
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“I would expect there to be some form of payment from platforms on which the publishers are publishing,” Hugh said in an interview with Bloomberg about the newspaper’s 2021 earnings, published Wednesday. Operating profit jumped 25% to £33.3 million ($42 million), beating pre-pandemic numbers, while sales grew 4% to £245 million.
Governments across the globe have been pushing big tech companies to pay for snippets of articles shown on the platforms. Earlier this month, UK ministers said a new Digital Markets Unit should intervene to “address unfair and unreasonable terms” from the biggest tech companies, with a mechanism which could lead to binding arbitration to address pricing disputes.
It follows a policy introduced in Australia which caused Facebook-owner Meta Platforms Inc. to temporarily cut off news. European publishers have also been pushing regulators for over a decade to force firms such as Google and Facebook to pay to publish content.
“I would hope that there’s also something in due course about ensuring that the industry as a whole finds business models that work on each platform,” Hugh said, “and that the platforms have got the requirement to ensure that that happens.”
Although they’ve lured away the lion’s share of digital classified advertising and digital display advertising, technology giants like Alphabet Inc. and Meta do already make some payments to publishers through initiatives like Facebook News.
“We are committed to supporting the freedom and sustainability of the press,” a spokeswoman for the Department for Digital, Culture, Media and Sport said by email. “Our new digital markets watchdog will be able to ensure fair prices for content in disputes between powerful platforms and news publishers.”
Print Costs
Despite the risk of recession, and inflation in costs like newsprint and energy already hitting the sector, Hugh said he anticipates growth will continue in the current year. He added there are no plans for the business to be sold - a frequent subject of speculation.
With 7 million registered users and 740,000 subscribers, Hugh said he’s “delighted” with the results and that he’s on track to hit a previously-stated target of 10 million users and 1 million subscriptions by the end of 2023.
The paper’s revenues are still lower than before Covid-19 stopped commuting and shuttered the country’s high streets. And as print circulations continue to decline across the sector, the Telegraph has outsourced functions outside of journalism and subscriptions. Hugh said a deal signed a year ago to let top rivals at the Daily Mail handle print sales boosted profits. Meanwhile the paper’s printing is done by Rupert Murdoch’s News UK.
(Updates with quotes from Telegraph media CEO and DCMS)
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