Reach media group’s chief executive says a decision to scrap “nonsense” surveys that acted as a barrier to articles had contributed to a surge in digital revenues that helped send the publisher’s shares to a 14-year high.
Results on Tuesday showed Reach, whose titles include the Daily Mirror, the Manchester Evening News and the Liverpool Echo, eked out a 4 per cent increase in half-year sales to £302.3 million (€353.8 million) despite the continued decline of the printed press.
Shares in Reach rallied almost 5 per cent in London trading to 328.25p, and hitting the highest level since 2007 even as more readers abandoned newspapers.
Print still accounts for more than three-quarters of the company’s revenues, and declines in both circulation and advertising led to a 5.2 per cent drop in like-for-like sales from physical media in the six months to June 27th.
However, a 43 per cent jump in digital revenues in the period offset the decline.
‘Engagement killer’
In common with other digital publishers grappling with how to make money from online content, Reach had previously sought to glean data on readers by asking them questions before they could view content.
But Jim Mullen, chief executive, said the attempt had been too crude given that many users supplied inaccurate information and others were put off visiting the sites altogether.
“Questionnaires were an engagement killer. People just got turned off; it ruined the experience,” Mr Mullen said. “As a rule, we don’t do that any more because people just fill in a load of nonsense.”
The company has sought instead to use more sophisticated approaches to understanding reader habits and make its sites more attractive to advertisers.
While none of the company’s online titles requires users to register, they encourage readers to sign up for free with an email address.
Reach has 6.7 million registered users – about 150 per cent more than a year ago – across its portfolio, which includes a stable of local websites under the Live brand. The company is expanding its line-up of sites, and this week it is launching NorfolkLive and MyShropshire.
Mr Mullen also argued that predictions of the demise of the printed press were overstated. The decline in circulation revenues had rallied from a 11.3 per cent slump in the first quarter to finish the first half down 5.1 per cent.
“A lot of the negativity around print – the level of it – is unwarranted,” he said. Given the typical readership age, mortality trends implied there was “another 25 years of engagement” in physical newspapers.
Reach acknowledged that comparative second-quarter figures were weak given the onset of the pandemic a year ago, but said there was “clear momentum” in its strategy thanks to digital revenue, registration and engagement trends.
Statutory first-half, pretax profits at the company, which also publishes OK! magazine, ticked higher from £25.2 million to £25.7 million. The board declared an interim dividend of 2.75p a share. – Copyright The Financial Times Limited 2021
