Guardian News and Media has a new strategic goal: to double its paying memberships to 2 million within the next three years.

The publisher’s CEO David Pemsel and editor-in-chief Katherine Viner outlined the new target in an email sent to staff on April 3. In the email, Pemsel and Viner recounted the severe financial challenges the Guardian faced three years ago, when its operating losses were forecast to exceed £80 million ($105 million) in a single year. At the time, its print revenue was in decline and its international businesses were growing but remained unprofitable. That, plus the increasingly rapid flow of ad revenue to the tech platforms Google and Facebook, rather than to publishers, was an additional pressure, they added.

The Guardian set out a three-year cost-cutting strategy, and appealed for public one-off donations and memberships. That’s shown signs of success. The Guardian is on track to break even at its three-year mark, and it will release its financials at the end of this month. While the email didn’t confirm whether Guardian News and Media parent had hit its target of producing an operating profit by the 2018-2019 financial year, Pemsel and Viner confirmed it’s on track to break even, after years of heavy losses and staff cuts in the U.K. and U.S.

Today the Guardian has 650,000 regular paying members, 360,000 of which are recurring paying members and 290,000 pay for print papers and digital memberships, according to the publisher. In the last year, it received more than 364,000 single contributions from around 318,000 contributors. In the last three years, the title received 1 million paid donations — a mix of one-offs, recurring paying members, and print sales.

The memo highlighted the focus on building a core daily readership rather than chasing global reach at all costs, with 40% more regular readers than three years ago and a growing number of print subscribers. It also said Guardian US and Guardian Australia had each doubled their revenues since 2016, and were both financially sustainable in their own right.

Guardian News and Media Group, which includes the Observer newspaper, is owned by The Scotts Trust — established in 1936 to secure the newspaper’s financial and editorial independence. “In cash terms, which is the best measure of our financial sustainability, we expect our cash outflow in 2018-19 to be within the £25-30 million [$33-$40 million] range which the Scott Trust can currently fund each year,” said Viner and Pemsel in the email.

The speed at which the Guardian reached 1 million contributors outpaced what many in the market thought was possible at the time.

“There is no reason why they cannot reach 2 million and beyond,” said Douglas McCabe, CEO of media analysis firm Enders Analysis.

The Guardian isn’t the only premium national news brand to turn to reader revenue to pull itself back from a financial crisis. In 2015 the New York Times pledged it would focus on doubling its digital revenue by 2020, in order to offset the decline in print revenue. Last month the Times generated more than $709 million in digital revenue last year, edging close to its stated goal of $800 million in digital sales by the end of 2020. The results have prompted the publisher to set another lofty target: to grow its reader revenue business to more than 10 million subscriptions by 2025.

Although the Guardian hasn’t gone down the paywall route, the industry-wide pivot to paid subscriptions has opened up concerns that there is a ceiling to how many people in the world are willing to pay for content. The Guardian’s more donation-led approach faces the same challenge. Given how young its membership strategy is, it may face churn and therefore must shift its focus from reach and audience acquisition to retention, added McCabe.

“It needs to set tough goals, like achieving 97% retention of subscribers who stick around for 3-plus years,” he said. “Journalists, not just commercial teams, should be incentivized to achieve these numbers. Second, the level of sophistication with which the company tracks, analyses and develops.

To arrive at its 2 million paying members target, the publisher will need to increase the level of sophistication around how it tracks, analyzes and develops its audience funnel, added McCabe.

“There is no need to track any user that happens to land on the site; only subscribers. The funnel needs to be able to distinguish between content that subscribers look at, and content that lends weight to their subscription commitment. Proxies like ‘time spent’ do not provide that,” he added.

While paid memberships is a core part of its strategy, remaining open-access and growing its advertising business remains a vital revenue stream for the publisher. Agencies have welcomed the news that the publisher has got itself back into the black.

“Their break-even target at the end of the previous fiscal year has been the first time that an outward facing pressure has been visible,” said Craig Smith, trading director of print and digital display at Mindshare, “and the fact they trusted their audience to help deliver that number, alongside traditional revenue streams, speaks volumes for the connection they have with them.”

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