The Guardian considers paywall strategy to defend revenues
The Guardian is considering a new paid-for content strategy and whitelisting trials to mitigate the effects of ad-blocking and further monetise its digital offering. In a speech given this week at the FT Digital Media Summit, David Pemsel, CEO of The Guardian Media Group, suggested that the company needs to reduce its reliance on online advertising and diversify its digital revenue stream if it is to break even within the next three years; making a paywall strategy seem likely possibility. This idea follows on from last month’s slew of job cuts at the newspaper, and price increases for its print product, which accounts for most of the company’s annual turnover, as the group looks for new ways to lessen the risks of revenue loss.

The Guardian is mulling a series of moves to shore-up the monetisation of its digital offering, including the potential introduction of a paid-for content strategy, plus trials to encourage ad blocker users to whitelist its website, according to its chief executive David Pemsel.

Speaking today (12 April) at the FT Digital Media Summit, The Guardian Media Group chief executive Pemsel told attendees that he hasn’t said no to a paywall, and could introduce a paid-for offering in tiers, starting with a membership system.

This is to diversify its digital revenue stream, reducing its reliance on online advertising, as the company hopes to break even within three years. Pemsel said there needs to be a better balance with how the publisher works with advertisers, and how much it can work with readers in a value exchange.

The Guardian has not been immune to the problems now facing publishers who have a strong footing in print, announcing a slew of job cuts last month.

Pemsel said the ad economics associated with print face challenges, adding: “Last year was terrible for print advertising and this hurt the Guardian as it did everyone else”.

In an attempt to counter this, the Guardian recently announced it was raising the price of its print product, to keep that side of the business afloat, which accounts for the lion's share of the the company’s annual turnover.

Pemsel said an increase in the price of its print product “demonstrates there is value there”, and said printing presses should only be turned off “when the economics don’t make sense, or when it is getting in the way of developing your digital product”. He added: “The Guardian will remain in print while our readers demand it”.

The Guardian’s paid-for content strategy is of increasing importance given the recent rise in consumers' use of ad blocking, something it intends to mitigate by asking users of said software to whitelist the publisher’s website.

Pemsel said the Guardian’s site is now “testing various screen graphics” in its trialling of whitelisting, adding: “when people are reminded they are using an ad blocker they are more likely to turn it off”.

His concerns in ad blocking reiterate the oft voiced issue of putting too much power in the hands of third-party aggregators. “Everyone needs to understand if we don’t address this quickly it will make those platforms like Facebook more and more powerful” added Pemsel.

He went on to describe The Guardian's content distribution strategy as 'meeting readers where they are in the digital space', and added that media owners must be "conscious of what Facebook is doing with data”.

He added: "If you think everything needs to be housed and contained in your platform you are going to lose out... you can’t step half-heartedly into these products”.