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From administration to break-even: City AM after THG takeover
After years of fighting for survival, City AM broke even in the period last year after its takeover by online beauty and wellbeing retailer THG in July.
The business newsbrand went into administration in July but was rescued in a pre-pack deal by the owner of Myprotein and beauty retailers Cult Beauty and Lookfantastic.
Since then City AM launched its first app within six weeks and has taken its headcount from 40 to 52.
Most of the investment so far has been in editorial, including hiring reporters, social media journalists, an opinion editor and the brand’s first UK editor (based in Manchester), taking the newsroom to a team of 30.
City AM Magazine, which stopped because of Covid-19, relaunched in digital in December getting 10,000 downloads through the baskets of THG’s “most affluent” customers. It will come back in print on a quarterly basis this year.
Chief operating officer Harry Owen told Press Gazette: “I was really proud that from acquisition until the end of last year, we broke even. We didn’t lose money. So as soon as the acquisition happened, we created stability.”
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Revenue is said to be up 12% in 2024 so far compared to January and February of last year. City AM has seen a major shift since pre-Covid when at least three-quarters of its revenue came from print – now it is said to be about 50/50 print and digital.
The Covid-19 pandemic hit the business hard as commuters stayed at home during the lockdowns and the free newspaper was forced to stop distribution for 18 months. In the meantime its digital transition accelerated.
The City AM website now attracts around 1.8 million unique monthly users, according to Google Analytics figures shared by Owen. Page views were up 65% year-on-year in February and are averaging month-on-month growth of 30%.
City AM has avoided the recent digital advertising downturn seen by many other publishers such as Reach, DMG Media and The Guardian because, Owen said, its small quality audience allows it to “hold a higher yield, even on the open market… we’re offering a quality audience at a high premium.”
According to a recent survey of readers, the website is now the biggest way people engage with City AM content, beating print for the first time.
Meanwhile the City AM app, which launched in September, is approaching 15,000 users.
Opportunity to nationalise City AM brand online
Despite this Owen said City AM will “absolutely” continue to publish in print, which has consistently had a free daily distribution of around 67,000 since October.
“We had a good Q4 in print, we’re having a good start to Q1,” Owen said. “We’re really pleased with the print product and the way it’s going. Pick-up’s good, we’re holding our ABCs. But it’s a volatile market. We know it’s volatile. So we have to keep diversifying.” This includes “good pick-up” in syndication revenue, he added.
The print newspaper has a “clear audience” in London business – and a “huge pocket of potential” readers on Mondays to Thursdays with 500,000 people working in the Square Mile and 120,000 in Canary Wharf. City AM stopped Friday print publication in January 2023 in response to changed working habits.
But “the real opportunity now is to take this brand and nationalise it, because the content is relevant, and broaden the content,” Owen said. This nationalisation will take place online, rather than expanding the print newspaper outside London.
“We’ve just hired our first UK editor in Manchester… so we’re covering a wider range of stories, but still really focused on what we’re good at, which is corporate news, Bank of England interest rates, we’re fantastic at Budget Day, things like that.”
A recent survey of 2,200 City AM readers showed that its average reader income is around £89,000 and it is disproportionately skewed to high-earners: 24% are additional rate taxpayers (taxable income over £125,140) compared to the UK average of 2.4% and 37% higher rate taxpayers (earning between £50,271 and £125,140; UK average 15%). Their geographical spread is 60% London, 25% in the rest of the UK and 15% international.
City AM now wants to reach a new and younger audience, Owen said. The average age of a City AM reader has gone up from the late 30s following its 2005 launch to the late 40s “which is why we’re really conscious about filling it up again from underneath”.
Owen explained: “In 2005, City AM was a deliberate repositioning against the FT to be a younger audience and I don’t think that’s changed really. It’s much more accessible. It’s free, for a start. So yeah, there’s a great opportunity.
“Also, there’s this convergence on social media, I think particularly, of younger people being interested in business news and investment. You really see that as a theme. So I think the opportunity to dial into that – it’s crazy that we may be a legacy media owner, even though we’re 18 years old. I don’t think we are. So I think there’s an opportunity there.”
In November, Owen charged the team with creating video content with no KPIs to see what works and what doesn’t.
“We’ve learned a lot from that and now we’ve come into the year with a clearer strategy about the frequency of publishing, the length of content, what topics we want to focus on,” he said, adding that monetisation will follow later.
Owen added: “We’ve always been very good at Twitter and Linkedin. Those have been strong platforms for us traditionally. We were astounded by our autumn statement Youtube piece that had 250,000 views and beat the FT and the BBC. I’m not saying we do this every day but that showed us that there was a real space for City AM content around these events.”
City AM’s most-viewed Youtube videos of 2024 so far are “Rishi Sunak bans vapes in the UK as the government crackdown on e-cigarettes” (27,000 views) and “Is London’s iconic BT Tower about to become a hotel?” (15,000 views).
Other areas of development have included a new vertical and newsletter called Ambition AM targeting entrepreneurs, an audience that will also be explored in events.
Events will increasingly be a “key business vertical for us”, Owen said. The flagship City AM Awards are continuing this year while the Impact Awards celebrating success in environmental, social, and governance were launched in December, the first new event under THG.
City AM also has a newsletter that sends three times every weekday – 7.45am, 12pm and 5pm – with 40,000 subscribers currently. Other newsletters in areas like lifestyle and the business of sport could follow in “little niches where City AM is really strong on content”.
All of this is going on with “unbelievable” support from THG, formerly known as The Hut Group, in areas like tech, social and SEO. “I can’t underestimate the tech side of it,” Owen said.
“You’ve got the entire resources of the THG tech team at your disposal. It’s huge, it’s groundbreaking for City AM.”
Owen added: “The great thing about being part of a £2bn company is we have both the enthusiasm from the leadership and management to invest and grow, but also a little bit of headway, like a bit of runway to be able to do that.
“City AM certainly for the last few years was fighting really hard for survival. And brilliantly, we’re not in that position at the moment and not for the future. We’re in a great place.” Manchester-based THG is led by founder and chief executive Matthew Moulding and brought in £2.2bn in revenue in 2022 from its beauty, nutrition and ingenuity (proprietary e-commerce) divisions.
THG’s previous venture into media was through publishing its digital magazines The Supplement and The Highlight, with a combined circulation of 600,000. With THG helping City AM Magazine’s digital distribution, the business brand may soon help the retailer’s magazines go into print for the first time.
Owen has spent 12 years at City AM but not consecutively – and he was not at the newsbrand last year when the acquisition took place.
He did one initial eight-year stint ending with almost four years as commercial director until December 2013. He then returned as chief operating officer between 2018 and 2021. Moulding persuaded him to return to that role last year to lead the brand after the takeover.
Asked if he hears much from Moulding now, Owen said: “I probably have more interaction with Matt than City AM deserves given the size of what we are within THG. But Matt’s really clear, and he speaks to me about this often, that he’s an investor in this. That is the conversation we have. So he’s very focused on helping facilitate growth.
“He’s also an avid reader of the product. So I quite often get Whatsapps from Matt about an article that he particularly likes… he’s a very positive influence on where we’re going. But obviously, there’s loads of people who are also involved.”
Despite this, Owen said City AM has had no editorial interference from Moulding. “He is absolutely 100% clear of City AM maintaining its editorial integrity… that’s really important to Matt, that City AM continues to be a trusted editorial product with integrity. So he is totally hands off when it comes to that. Positive Whatsapps, but no editorial strategy.”
Owen added: “I’ve worked at other media organisations where owners were heavily involved. If anything, I feel a lot of freedom and trust being given to us as custodians because… we have more in common than one might expect. On the face of it here’s this group of people up in Manchester, here’s a group in London. The products don’t really match.
“But actually, all of us are entrepreneurs number one. We’re all pro business. We’re all champions of UK business – we want to write good news stories. That’s quite hard right now, but we want to write good news stories. We also want to hold people to account. So if you like, I guess our ethics and values are really similar.”
Owen said that when he first joined City AM at its launch in 2005 it was “high risk. I’ve spent more or less most of my proper career trying to see City AM achieve its potential and I’ve never felt closer to that.”
He suggested that “sometimes you’ve got to break a few eggs. Maybe this was the thing that needed to happen… it’s a really positive time and just to have that [THG] support behind you, I can’t tell you the freedom it gives you because you’re not making decisions from a position of weakness.”
Owen has big goals to keep up City AM’s growth over the next year. He wants the website to continue growing at a similar pace and enter the list of the 50 biggest news websites in the UK, as well as reach 100,000 app downloads. He also wants the commercial operation to begin scaling up to match the editorial growth.
“I think City AM has always been very good at providing solutions for clients that want to talk to our audience. We’ve always had to be quite creative, because we were quite small. But the difference is now we can put a client relationship into the biggest studios in the UK. We can deliver SEO on their campaign that is far beyond anything we could have promised five years ago.
“So I think you’re going to see City AM considered for more briefs than it ever has been because people now know we have the tech support behind us.”
Eventually City AM will be ready to work with THG on e-commerce and affiliate marketing, the “bedrocks” of Moulding’s company, but “for us it was about spending this initial time focusing on the core products and not trying to do everything tomorrow”.
“So, yes, I can see a future where we will work with THG on ecom and affiliate marketing. That’s not happening yet. That is to come. The list is really long. But everything’s going in the right direction. I couldn’t be happier to be back. It’s a really exciting time.”
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