The Telegraph’s carefully executed outsourcing of print advertising sales to Mail Metro Media fine-tunes its subscriber-first strategy.

Consolidation and collaboration are inevitable in a highly-competitive, structurally-shrinking news industry.                           

Reader-first models have emerged as the consistent theme for quality publishers, but the trade-offs, investment approaches and executions are highly differentiated.

Capital-rich DMGT has offered a £70m cash consideration, c.10x EBITDA, for New Scientist.

DMGT has tightened its portfolio in recent years, and recent acquisitions firmly push the core business back towards consumer media.

Why New Scientist?

In a challenging media marketplace, quality online news services generated hundreds of thousands of new buyers in 2020, perhaps inching ahead of print in terms of UK household propensity-to-pay.

But reader-first models are not only about subscriptions. The UK’s first national print title to go online-only, The Independent, has achieved operating profits since reconfiguring its cost base in 2016.

The Independent defies many investor assumptions about news. Solutions for smaller businesses may diverge more from industry giants than is commonly expressed, and without distribution change, editorial, product and commercial transformation is slower.

National World Plc, David Montgomery’s investment vehicle founded in 2019, will buy JPI Media for £10.2 million, a tiny 1.7x EBITDA.

Disposals by JPI Media shifted its operating model towards digital, National World will shift this further.

This acquisition kicks off what is likely to be a busy period for M&A, though local consolidation remains hindered by the local media mergers regime.

UK consumer magazine print circulation fell -9% in 2015 while total display advertising fell -7% as magazines continue to outperform other press categories.

However, the overall picture is still one of falling consumer and advertiser demand and the fierce competition for user attention and advertising spend online is reflected in consumer magazine digital display advertising growth of just 12%: about half of the total online display growth rate in 2015.

At the same time publishers are starting to embrace radical innovation using their brands to produce multiple revenue streams ranging from e-commerce to events, as we explore in our four publisher case studies included in this report.