Independent news media (INM) has made a number of announcements this week following publications of its financial state to December 2018. While there was some positive news in regards to profits for the company, failings and changes to how the company operates also followed.
This includes a new subscription plan, potential redundancies and finding new ways to offset falling advertising and publication profits.
Independent News & Media (INM) announced profits of €24.1m for 2018. This was above market expectations but included a number of large one-off costs which would have increased its profit margins even more.
While above market expectations, it was still 15% below 2017 levels.
The media companies titles include Independent.ie, Sunday independent the Sunday world and Belfast Telegraph among others. It is the largest Private owned media company in the country with some popular titles, however, it has admitted shortcomings and a need for change.
The legal costs totalling €3.5 million are due to investigation in regards to data leaks and whistleblower allegations within the company.
The investigations were launched by the Office of the Director of Corporate Enforcement (ODCE) and the Data Protection Commissioner (DPC). This have led to the appointment of High Court inspectors after an alleged major data breach at the group in 2014.
“The company is co-operating with the inspectors and the DPC in their respective investigations,” said Mr Michael Doorly the companies chief executive. They do not expect costs to reach the same level in 2019.
Fall in profits
The fall in profits for 2018 has been primarily blamed on a decline in print and online advertising. As media giants such as Google and Facebook continue to consolidate online advertising, it has been increasingly difficult for media outlets to maintain previous profit margins.
There was a silver lining in regards to Classified ads, primarily with carsireland.com which saw profits increase by 18.2%.
Need for change
Its chief executive Mr Doorly and chairman Murdoch MacLennan said the company has recognised the need for change and that they have been looking at different avenue to increase the companies profitability.
Mr Murdoch said “We have recorded a financial performance for 2018 ahead of market expectations and I can assure you that despite the challenges facing the industry the board and senior executive team of your group are both determined and confident that we are heading in the right direction to build a sustainable business for the future and to create shareholder value,”.
With the rapid change within the Industry, Mr Doorly said that some tough choices must be made. He recognised that the company faces a number of challenges in the future.
“While change is happening right across our sector, which is facing the challenges of digital disruption, changing consumer behaviours and economic shifts, I am pleased to report that we are moving forward in reshaping our business to better meet the needs of our print and online readers and customers. Producing quality content remains essential to the future of our business and to that end the calibre of our editorial team is unmatched in the Irish market. I would like to thank all of my colleagues in INM for their continued commitment and resolve in delivering to date on our new strategy,” he said.
Plans for the Future
Earlier this year INM told staff that is expected to make 30 redundancies across the business, as management unveiled its new strategic three-year plan reported RTE.
Among the changes INM plan to introduce a subscription service to its online publications. It hoped to roll out this project by 2020. This is hoped to reduce the reliance on online advertising.
“We can’t just slap up a paywall. We need to be able to understand our audience,” Mr Doorly said. Recognising that some customers will be turned away by these announcements.
It is hoped that their apps and websites will also be updated for better user experiences.
“We will continue to confront the many challenges currently dominating our industry’s wide agenda, including the unfettered advance of the global technology platforms such as Google and Facebook, the inexorable rise of fake news and the cold climate for consolidation in the Irish market as a result of inadequacies in the competition approval process, not to mention our outdated libel and legal regime.”relayed the Irish Times.
Some publications in Ireland already use a subscription model on various topics including the Irish Times. It is not yet known how INM will introduce the subscription model to its publications.
With a new business plan going forward and an ever-changing environment, it is an exciting and challenging time for media of all kinds.