Six months after furloughing staff and cutting wages during the first UK coronavirus pandemic lockdown, The Independent is increasing its US presence and looking to expand into China and India.
Publisher Independent Digital News and Media (IDNM) has been in profit since closing its print editions in 2016 and reported a pre-tax profit of £2.3m on turnover of £27m in 2019.
It now plans to expand in India in the next few months – growing its editorial team in Delhi with plans to hire in Mumbai – and in China in about a year. It launched a Spanish-language website in September.
‘Wow were we lucky…’
Leonard said the move to digital has left The Independent far better placed to deal with the effects of the pandemic than other competitor national newspaper titles: “Hindsight is 20/20 vision of course, but wow were we lucky to make the brave decision we did in 2016 to become digital only.
“We’ve had five years to work and to develop a means of creating journalism and distributing it globally as a remote and virtual operation.”
He said he believed it would be at least a year before the majority of the Independent’s journalists return to its newsroom in High Street Kensington, west London, which it shares with the Standard, Mail and Metro titles.
A survey of the Independent’s 200 staff found that the vast majority – between 65% and 75% – were “keen to keep a more flexible working schedule” even after a return to “normal”. Leonard predicts this will work itself into a three or four-day office week across all departments, including editorial.
‘We did have to make some challenging decisions’
“We did have to make some challenging decisions,” said Leonard. As with many other titles across the news industry, the Independent reduced salaries, but protected those on the lowest wages. More than ten journalists, largely those on sport, were furloughed, but most returned after the first month of lockdown.
So far it has managed to avoid making redundancies, but, Leonard said: “It’s not to say that couldn’t or wouldn’t happen if we see a significant downturn.” This was before a second lockdown was announced.
Working with the Government on Covid-19 adverts has provided a vital source of direct advertising for the title, but Leonard said its “international footprint” is what has really helped it to survive.
The Independent’s traffic is broken roughly into thirds: UK, US and rest of the world.
US is ‘most strategic’ market and ‘very commercial’
The Independent’s new Spanish-language news website, Independent en Español, is aimed at the estimated 43 million Spanish-speakers in the US, responding to the boost in traffic from across the Atlantic.
The title has embraced technology to provide the news service, using a content management system (CMS) that auto-translates English into Spanish. A partner firm quality controls the translation while “topping and tailing” content for the Latin American market.
It is the fifth “multi-lingual edition” of the Independent, which publishes in Arabic, Urdu, Turkish and Farsi through a licensed partnership with the Saudi Research and Marketing Group, struck in 2017/18. The deal was subject to an Ofcom probe on free expression grounds, but not taken further by the watchdog.
Leonard described these franchised sites as “the first big wave” and said that as they grew the team thought “why not drive something that’s owned and operated by us and develop that thinking”.
Spanish was the logical move given its “significant penetration” across the European and particularly the US markets, he said.
The US has been the Independent’s largest market over the past five years and is now its “most strategic” as well, said Leonard. He said it “really took off” with the 2016 presidential election which put Donald Trump in the White House – the so-called ‘Trump Bump’ in effect.
Leonard said the US market is “very high yielding”, partly because the newsbrand is “really effectively” monetising it, “not only through our own advertising sales on the ground, but through partnerships via Taboolah and Facebook Instant Articles”.
Its overheads are also low, with only about 25 staff on American soil, mostly journalists and some sales, although it plans to grow this by another third this year. It has steadily grown its presence Stateside since 2016, opening a Washington bureau in 2018 and hiring a dedicated US editor, Katie Davies, at the start of this year. An LA bureau is also planned.
“The sales opportunity for not only the [election] campaign, but for lobbyist groups and special interest is very strong [in the US],” said Leonard.
He said Facebook Instant Articles is an “important revenue stream for us” and is “equal if not more valuable” on the US side than in the UK, with US yields and Effective CPMs (the amount of revenue per 1000 impressions generated by ads) in the US “tending to be a bit higher”.
“That helps what we call the automated line, which would include open marketplace, Facebook Instant Articles and our partnership with Taboolah… so if we’re creating great content then those lines rise very nicely with that content and the audience that comes to it,” he said.
“That actually creates a very durable, sustainable [income].”
The Independent takes an “ecumenical view” of its partnerships with the likes of Facebook and Google, whom Leonard calls “very strong strategic partners of ours”. He said this position is “very different from what our larger competitors might do and view” and a “big advantage, I find, in terms of how we go about doing our business”.
As such The Independent seems to be sitting out the rolling battle between news publishers and the Duopoly, in which newsmakers are asking for a fairer share of the tech giants’ profits.
Leonard said America remained a “very commercial market” during the pandemic. “There isn’t an instant lurch away from commitment in ad spend, because brands just feel they have to do it,” he said. “They’re just changing their creative [content] as opposed to cancelling.”
While some industries are “under duress”, such as travel, Leonard said financial services, planning, education and distance learning are “very vibrant”, along with digital-only retail.
Publishers who are not able to “flex and replace things” will have found it more difficult, he said, particularly those still dependent on print.
Future for e-commerce
Advertising now makes up roughly 60% of The Independent’s total revenues after a “very conscious effort” at the newsbrand to develop content sales, such as licensing, syndication and reader revenues.
Leonard said “driving that other wedge of the pie” was one of his priorities as CEO alongside diversifying within ad income during the coronavirus – “we may get hit short term with direct campaigns, but those are offset by a very high volume of high-yield automated advertising”.
The Independent uses an “anonymous to known” strategy for its readers, aiming to drive more people into the “known” category. “With the advent of cookie blocking [in] early 2022, it’s really vital on our agenda to enrich our first-party data pool,” said Leonard.
He said the newsbrand’s subscriptions (Indy Premium), donations and e-commerce (Indy Best) activities were “still in a very early stage relative to other competitors”, but he was “pleased with how it’s growing”.
“It’s harder to compete, particularly on subscriptions, in the American market – there are so many choices,” he said.
“Whilst it is a subscription-based market, if you’re sitting in California and we’re asking for the equivalent of nine bucks a month, why would you? There are hundreds of other sources.
“And we’re fine with that because we like to have the option of both free-to-air advertising-supported [content], as well as a non-advertising experience for subscribers.”
He said The Independent is “more fixated on that wider category of registered users, or those who’ve engaged with us” because these readers form a pool that feeds into targeted premium ad sales and the creation of new products, “as well as getting our fair share”.
Paid services, both B2B and B2C, are “really key drivers for our upcoming year”, said Leonard. He said he is also looking at the development of new extensions of the Indy brand, such as Indy Best or Indy 100, which serve affiliate links to retail partners.
“My vision is that those become businesses onto themselves and can actually give us even more… richer e-commerce,” said Leonard. Indy Best in particular is “extremely popular here and in America,” he added, “so getting that right and investing in redesigning it is one of our goals”.