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| Version 0 | Version 1 |
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| Mail Online powers into global expansion with onslaught on US | Mail Online powers into global expansion with onslaught on US |
| (about 14 hours later) | |
| This week MediaGuardian 25, our survey of Britain's most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at the Daily Mail & General Trust. | This week MediaGuardian 25, our survey of Britain's most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at the Daily Mail & General Trust. |
| Martin Clarke is so bullish about the prospects for Mail Online that he felt able to take a cheeky poke at its nearest internet rival the New York Times last week, adapting the newspaper's 117-year old motto ("all the news that's fit to print") into "all the news that's fit to talk about" – the proposition he is confident will power the next phase of its US expansion. | |
| The website's publisher, who included the tongue-in-cheek brand statement in an enthusiastically received slide presentation to City investors and analysts, has a masterplan that he believes will see it hit £100m-plus digital revenues in the next three to five years. | The website's publisher, who included the tongue-in-cheek brand statement in an enthusiastically received slide presentation to City investors and analysts, has a masterplan that he believes will see it hit £100m-plus digital revenues in the next three to five years. |
| Mail Online has yet to officially settle on a "brand idea" – Clarke inserted TBD, meaning To Be Decided, in a comparison against US competitors including Buzzfeed, TMZ, Gawker and Huffington Post. But the playful 21st-century update of the New York Times's slogan, coined in 1896, neatly sums up the digital strategy which has made Mail Online the world's biggest newspaper website, with more than 110 million users a month. | Mail Online has yet to officially settle on a "brand idea" – Clarke inserted TBD, meaning To Be Decided, in a comparison against US competitors including Buzzfeed, TMZ, Gawker and Huffington Post. But the playful 21st-century update of the New York Times's slogan, coined in 1896, neatly sums up the digital strategy which has made Mail Online the world's biggest newspaper website, with more than 110 million users a month. |
| Positioning it very differently from the print Mail titles in the UK, a US ad for the website says that papers like the New York Times or Wall Street Journal cover weighty news, but asks "how many of your friends discuss the Arab Spring at lunch?" Unlike them, Mail Online brings you "what you want to talk about. It's not so serious. And it's never more than you need." | Positioning it very differently from the print Mail titles in the UK, a US ad for the website says that papers like the New York Times or Wall Street Journal cover weighty news, but asks "how many of your friends discuss the Arab Spring at lunch?" Unlike them, Mail Online brings you "what you want to talk about. It's not so serious. And it's never more than you need." |
| Last week the website's parent company, Daily Mail & General Trust, revealed that it had glimpsed newspaper nirvana, with Mail Online's digital advertising revenue growth in the five months to the end of February offsetting the decline in print ad revenues at the Daily Mail and Mail on Sunday for the first time. | Last week the website's parent company, Daily Mail & General Trust, revealed that it had glimpsed newspaper nirvana, with Mail Online's digital advertising revenue growth in the five months to the end of February offsetting the decline in print ad revenues at the Daily Mail and Mail on Sunday for the first time. |
| "We have been waiting for this moment for some time," said Stephen Daintith, finance director at DMGT. "I wouldn't want to pretend it is a permanent shift, there is a long way to go and there will be occasions that the print decline outstrips the digital rise, but it is a huge moment." | "We have been waiting for this moment for some time," said Stephen Daintith, finance director at DMGT. "I wouldn't want to pretend it is a permanent shift, there is a long way to go and there will be occasions that the print decline outstrips the digital rise, but it is a huge moment." |
| Mail Online also ticks all the boxes investors are looking for to make possible a successful transition from a print legacy to a digital future. The average age of a Mail Online reader is thought to be 37 (compared to 58 for the print version of the Daily Mail and 54 for the Mail on Sunday), almost half of access to its content is via mobile devices, and international growth prospects are huge. | Mail Online also ticks all the boxes investors are looking for to make possible a successful transition from a print legacy to a digital future. The average age of a Mail Online reader is thought to be 37 (compared to 58 for the print version of the Daily Mail and 54 for the Mail on Sunday), almost half of access to its content is via mobile devices, and international growth prospects are huge. |
| More than 60% of Mail Online's total online audience is outside the UK, with the vast majority of that 70 million-plus in the US; yet the business has barely scratched the surface of the online ad market there, making between £250,000 and £300,000 per month. | More than 60% of Mail Online's total online audience is outside the UK, with the vast majority of that 70 million-plus in the US; yet the business has barely scratched the surface of the online ad market there, making between £250,000 and £300,000 per month. |
| In the UK, Mail Online is making £2.5m to £3m a month; overall it is expected to make £45m in revenue and an operating loss in the year to the end of September. To put this in perspective the Mail titles are estimated to make about £600m in revenues and an operating profit of £67m; while Metro, the DMGT-owned freesheet available in Britain's biggest cities, is estimated to make £95m revenues and £8m operating profit. | In the UK, Mail Online is making £2.5m to £3m a month; overall it is expected to make £45m in revenue and an operating loss in the year to the end of September. To put this in perspective the Mail titles are estimated to make about £600m in revenues and an operating profit of £67m; while Metro, the DMGT-owned freesheet available in Britain's biggest cities, is estimated to make £95m revenues and £8m operating profit. |
| Daintith believes that Mail Online could be profitable now, but growth is the aim. "The focus is the US, we have great audience engagement and it is a pretty mature and very valuable ad market to go for," he says. "The actual investment in Mail Online has been very small, £50m cumulative over about five years. Right now we are not chasing profits, we are focused on growing global revenues and a globally engaged audience. We believe profits will follow, but where we see an opportunity we are in investment mode." | Daintith believes that Mail Online could be profitable now, but growth is the aim. "The focus is the US, we have great audience engagement and it is a pretty mature and very valuable ad market to go for," he says. "The actual investment in Mail Online has been very small, £50m cumulative over about five years. Right now we are not chasing profits, we are focused on growing global revenues and a globally engaged audience. We believe profits will follow, but where we see an opportunity we are in investment mode." |
| DMGT executives such as Daintith have been keen to change the City's "negative narrative", with investors, as they see it, over-focusing for years on the company's print business. Print advertising now accounts for just 20% of DMGT's total revenues (compared with 40% in 2005), and its importance has been further eroded by the rise of Mail Online, and the hiving off of DMGT's ailing regional newspaper business Northcliffe Media to David Montgomery's Local World. | DMGT executives such as Daintith have been keen to change the City's "negative narrative", with investors, as they see it, over-focusing for years on the company's print business. Print advertising now accounts for just 20% of DMGT's total revenues (compared with 40% in 2005), and its importance has been further eroded by the rise of Mail Online, and the hiving off of DMGT's ailing regional newspaper business Northcliffe Media to David Montgomery's Local World. |
| In a hypothetical, imagine-if-they-sold-it exercise, Alex DeGroote, a media analyst at the stockbrokers Panmure Gordon, estimates that Mail Online could be worth £500m. | In a hypothetical, imagine-if-they-sold-it exercise, Alex DeGroote, a media analyst at the stockbrokers Panmure Gordon, estimates that Mail Online could be worth £500m. |
| As for the combined digital assets of DMGT's consumer media division DMG Media – among them 51% of the property group Zoopla, which includes Primelocation.com and recruitment businesses such as jobsite.co.uk – they could add up to more than £1bn. | As for the combined digital assets of DMGT's consumer media division DMG Media – among them 51% of the property group Zoopla, which includes Primelocation.com and recruitment businesses such as jobsite.co.uk – they could add up to more than £1bn. |
| "I'm not saying they will do it but HuffPo was acquired at about 10 times revenues and who knows in four or five years what DMGT's thinking will be," says DeGroote. "They will have options, [trying to work out the total value] is just a bit of blue-sky thinking." | "I'm not saying they will do it but HuffPo was acquired at about 10 times revenues and who knows in four or five years what DMGT's thinking will be," says DeGroote. "They will have options, [trying to work out the total value] is just a bit of blue-sky thinking." |
| As DMGT's top executives were delivering their rosy vision of an ad-funded future to a room packed to the aisles with investors and analysts, Rupert Murdoch was preparing to announce that a form of paywall is to be erected at Sun Online. | As DMGT's top executives were delivering their rosy vision of an ad-funded future to a room packed to the aisles with investors and analysts, Rupert Murdoch was preparing to announce that a form of paywall is to be erected at Sun Online. |
| Just four years ago Mail Online could only call itself the UK's fourth biggest national newspaper website – behind the Guardian, Telegraph and a pre-paywall Times – with 23 million monthly browsers. Sun Online, the website of the UK's biggest selling daily newspaper, managed fifth spot with 22 million monthly browsers. Last month it reported 27 million monthly users. | Just four years ago Mail Online could only call itself the UK's fourth biggest national newspaper website – behind the Guardian, Telegraph and a pre-paywall Times – with 23 million monthly browsers. Sun Online, the website of the UK's biggest selling daily newspaper, managed fifth spot with 22 million monthly browsers. Last month it reported 27 million monthly users. |
| "The Sun never developed the scale that perhaps it could and should have, the problem is that now not everyone can have that scale," says one City source. "As a result [proprietors] have got to look at locking down a core of users and generating revenue streams such as subscriptions. There is space for different models – there is a natural flexibility to the metered model of the New York Times and the Telegraph, for example. | "The Sun never developed the scale that perhaps it could and should have, the problem is that now not everyone can have that scale," says one City source. "As a result [proprietors] have got to look at locking down a core of users and generating revenue streams such as subscriptions. There is space for different models – there is a natural flexibility to the metered model of the New York Times and the Telegraph, for example. |
| "Mail Online will start to see signs of a growth slowdown, though not quite yet. But now they have the scale that gives them options, and muscle, on monetising users – their scale really does mean something now." | "Mail Online will start to see signs of a growth slowdown, though not quite yet. But now they have the scale that gives them options, and muscle, on monetising users – their scale really does mean something now." |
| The numbers | The numbers |
| Mail Online reach: 110 million monthly unique browsers (February ABC) | Mail Online reach: 110 million monthly unique browsers (February ABC) |
| Revenues: £45m in 2013, projected to be £100m in three to five years | Revenues: £45m in 2013, projected to be £100m in three to five years |
| Average reader age: 37 (Daily Mail: 58, Mail on Sunday: 54) | Average reader age: 37 (Daily Mail: 58, Mail on Sunday: 54) |
| Proportion of visits from mobiles and tablets: 43% | Proportion of visits from mobiles and tablets: 43% |