This article is part of a marketing campaign for Crikey which aims to share more information about the process and costs of operating as an independent media company.
Readers frequently tell us that the main reason they subscribe to Crikey is because of our independence. And that works for us, because the only reason we can stay independent is thanks to our subscribers.
Subscribers make our journalism happen, so we want to be transparent with you about exactly how it happens. When you subscribe to Crikey, how is that money spent? And just how much does it cost to create reader-funded, independent, quality Australian journalism?
Ryan Chiam is the financial planning and analysis manager at Private Media, Crikey’s parent company. He sat down to run us through the costs.
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Where Crikey’s funding comes from
Crikey’s funding model is called a “reader revenue” model. All that means is that readers fund our journalism. This is different to much of Australian media which is traditionally funded through a combination of advertising, shareholders, government funding and, more recently, through ventures such as online gambling.
To be clear, we don’t get 100% of our funding from readers and we’re always up for “diversifying our revenue stream” (business speak for “getting money from a variety of sources”) as long as it doesn’t impact our editorial integrity. Crikey gets a small amount of funding by showing ads to subscribers. In the past we’ve also received government funding related to COVID-19 and we’ve been the recipient of Judith Neilson Institute grants and private philanthropy. But the single biggest source of funding that drives us, and the backbone of our journalism, is reader funding.
More and more, other publishers are also turning to readers to support the journalism they read, but as Chiam points out, for Crikey, it’s part of our DNA.
“The bulk of Crikey’s revenue really is subscriptions,” Chiam says. “It’s always been this way.”
Advertising accounts for very little of the site’s overall funding. As Chiam points out, funding via advertisers is currently so low that there’s no risk of advertisers influencing editorial integrity — and changing that would be a difficult decision.
“For the first half of this financial year … Crikey advertising revenue has been about 0.9%,” Chiam says. “Exploring more options for advertising revenue would be a difficult thing for Crikey, because obviously we don’t want to be perceived as anything but impartial.”
On top of that, he says being reader-funded creates a unique culture at Crikey, where the reader is front and centre of all the decisions made.
“The culture throughout the whole company is very passionate about putting the reader first.”
On top of subscriber funding and a tiny amount of advertiser money, the licensing deals that were introduced in Australia in late 2020, wherein some tech companies agreed to pay publishers for their content, gave Crikey — and much of the Australian media — an injection of funding. However, most of these arrangements were struck over a fixed time period, which means publishers have little certainty about how long they will last.
So most funding comes from subscribers. Here’s how that money is spent:
The bulk of Crikey’s funding — 53% — is invested straight back into the journalism that our subscribers read.
“Editorial is obviously our biggest cost. We’re a media company, a publishing business, so that’s understandable,” Chiam says.
What’s less obvious, he says, is exactly what comes under the term “editorial”.
An article can go from idea to publication in a number of different ways. Editors can commission reporters or contributors based on the news cycle, the reporting team can brainstorm angles on each others’ beats, or experts can pitch stories based on their area of expertise.
To give an example of the work that goes into each article, here’s one way it can happen: a story gets pitched by a reporter and greenlit by the editor. Then the reporter researches, seeks out sources, conducts interviews and builds the article. This process could be quick — a few hours for a simple report — or it could take days or weeks if it’s a delicate investigation (think David Hardaker’s work on the Esther Foundation, or Amber Schultz’s series, Kidnapped by the state).
Once it’s been fleshed out, back to the editor the article goes for structural work, fact-checking and a news check; is this information that our subscribers don’t already know and should know? Is this factually accurate? Is this the best way to tell this story? After this, it might get passed back to the reporter for more work or emailed to the lawyers for a legal check. Or it could get spiked — and this happens more than you’d think.
If it’s legally and structurally sound, it goes on to the subeditors who check facts (again), dates, numbers, figures, spelling and syntax. A headline will be brainstormed between reporters and editors, an image selected and bought or designed by our editorial designers, and SEO will be added so search engines can crawl the page and make it searchable. Then, at last, the story will be published. But the editorial work doesn’t stop there.
The production editors work with the editor to build the story into the daily newsletter. The story also gets placed on the homepage and shared on social media by audience editors who work on getting it out on the right platform in the right format — text, graphic, short video — so that it reaches the right audience. Ideally, the editorial journey ends there. But if someone has a legal issue with an article, even more costs come in (and these costs can get quite high, quite fast).
So that’s what goes into a single story. But there are even more unseen costs on the editorial side, Chiam says.
“[Editorial] is any costs related to journalists doing their job,” he explains. “It’s subscriptions we take out [e.g. to other news publications], phone calls, travel, food while travelling, a monthly retainer to our lawyers.”
Marketing and reader revenue
“Because we’re operating in a digital space, our next largest costs are marketing and tech,” Chiam explains. “Together, these two make up around 30% of Crikey’s costs.”
Crikey shares its growth team (previously “reader revenue”) team with its sister publications SmartCompany, The Mandarin and more recently Inc. Australia.
This is both practical and essential. Crikey is a small publication, by sharing resources with other publications we get access to a fully-fledged marketing and development team without the full costs of that coming from our subscribers alone.
Marketing is an essential cost for a digital-only publication trying to grow and compete in a crowded space. Without the work of the marketing team, readers might not find Crikey and they might never subscribe. This would mean fewer resources for the editorial team to produce quality journalism.
Marketing costs are varied; they include paying for the team members — approximately five and a half people sharing their time between four publications — who work to figure out what subscribers like about Crikey and then tell other people about it.
That means working on the “brand”, designing ads, figuring out where to place them, what to pay for them and who to show them to. It also covers the cost of paying for these ads and trying new things. For example, when Crikey published a series on Scott Morrison’s lies, we worked with a digital agency to design a billboard to advertise the series. Unfortunately, when it came down to it, no outdoor advertising company would put these ads on their boards, but if they had, that money would have come out of our marketing costs and we would have considered it money well spent.
Development and IT
Another cost that is shared between all publications and flies under the radar is development and IT. Put simply, this is the cost of keeping our platform up and running and making it usable for our subscribers.
That includes building the site, adding features, fixing bugs, designing the newsletters and adding automation which saves time for other teams. It also includes a lot of recurring costs such as licences, security and tech integrations.
Often development costs cross over with marketing (building a new pop-up to offer a subscription deal), and sometimes it crosses over with editorial (creating a new sort of landing page to showcase an investigation series better). It’s always an essential part of keeping Crikey running.
Office space, utilities, insurance and office supplies account for 5% of Crikey’s spending. It’s the boring but essential stuff of having a seat to plonk yourself down on as you write out a yarn, electricity to run the laptop on which you design ads, a pen in your hand while you negotiate publishing deals and paper to print off a contract when you hire a new reporter.
Operations (management, finance, people and culture)
Operations consists of our shared management services; our finance team, HR, leadership, software licenses and more.
When it comes to operations, Chiam stresses that Crikey runs a very lean ship at 12% of the overall costs.
Chiam himself previously worked for much larger companies and finds that where before he was siloed in his particular area of speciality, at Private Media everyone in leadership and operational roles pitches in where needed to get the job done.
“In previous roles I just looked after financial forecasting, budgeting and monitoring,” he says. “Now apart from all things finance, I’ve also filled in for HR and IT where required, and the other week I was in Sydney looking for an office space. It’s a lot of stuff that I would never have done in my previous roles.”
“It’s just part and parcel of the job here, because we’re a small company. But I like it. I feel like I’m contributing more to the business, I feel more a part of the actual organisation … so it’s more fulfilling work.”
Of course, the editorial side of Crikey stands separate from the business and marketing side — an essential split for editorial integrity — but as Chiam points out, everyone at Crikey, no matter what their role, is working for the same thing: strong, independent Australian journalism.
“When I look at the work the journos are doing, you guys are very passionate and opinionated and it’s nice to see that my work is supporting you in that way.”