Rapid Response: The Guardian’s secret weapon against media’s collapse, with CEO Anna Bateson

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1:30That's mastersofscale.com slash apply26. One of the most helpful things I was told by a rather informed board member was that even the most sophisticated engineers working in the most extraordinarily frontier level kind of AI don't really know what's going to happen in the next sort of 12 weeks, let alone in the next 12 months. You could spend weeks doing plans for the next five years, which will become irrelevant and sort of redundant, and actually not trying to do longer sort of kind of forecasting or planning, but actually thinking, how do we set ourselves up to be ready to kind of adapt and adjust?

2:14That's what I try and focus on. That's Anna Bateson, CEO of Guardian Media Group, publisher of The Guardian. The Guardian has had remarkable success as a news brand, growing globally when other aspirers like the Washington Post have struggled. That's in part because of The Guardian's unusual ownership structure under the umbrella of a 90-year-old trust that helps provide stability. But Anna has also embraced the exceedingly modern realities of speed, flexibility, and focus. I wanted to learn how The Guardian is tapping into multiple business models and into the emotional aspects of a brand to differentiate itself.

2:56And Anna did not disappoint. So let's get into it. I'm Bob Safian, and this is Rapid Response.

3:06I'm Bob Safian. I'm here with Anna Bateson, CEO of Guardian Media Group. Anna, thanks for joining us. Well, thank you for having me. Today, the Guardian is the fifth most trafficked news site in the world. More than 1.4 million subscribers provide regular financial support. It's an impressive feat for, you know, for a legacy British newspaper to turn into a global brand, especially when other news outlets are struggling. I'm eager to learn your secret. Is there a single secret that underlies all of this? No, there's never a single secret. I think there are a number of things that really contributed.

3:49The first is that we were very early to embrace digital and to see the opportunities of digital. and that decision, which is I think 30 years ago or something, took us from being the ninth biggest national newspaper in the UK, so inherently parochial to a degree, to really build audiences all around the world. The uniqueness of our ownership model, the independence that's endowed by the Scott Trust also allows us to think long term and that did allow us the opportunity to grow. It didn't feel as though we were in a good position 10 years ago when you began to realize that, crucially, digital advertising wasn't going to sort of substitute for print advertising.

4:29But actually, that was the basis then of us being able to build the reader revenue model. The first important thing was embracing digital. Does that make you more aggressive about embracing AI because that's maybe the next turn in the business? No, I don't think it makes us more aggressive about embracing AI. I think it means that we are genuinely a deeply digital organization. We look at AI through a particularly informed lens, quite a curious lens. We have aimed to try and be really cautious and thoughtful, actually, in how we endeavor to understand AI, in how we think about its application within our organization, across all aspects of the organization, the changes it's going to make to our audience's behaviors.

5:21It's incumbent on all of us to truly understand it as a technology. And I think you can only understand it by applying it and by using it. You mentioned the Guardian is owned by a private trust. Yes. So that means you don't need to necessarily pass down all of your profit. The revenue you generate can be reinvested in the content. And you've kind of got a backstop in tougher times, if I'm understanding that correctly. Are there any downsides to this structure? Any complications? Because you are fairly unusual to have this kind of a setup. Yes, it is unusual. I think it's an enormous strategic advantage for us, a really key point of differentiation.

6:02The sole purpose of the Scott Trust is to ensure that the Guardian thrives in perpetuity. So that's an extraordinarily privileged ownership structure to be the beneficiary of. We have quite a lot of governance as a result. So that's something that we have to navigate. But no, I think that this is, it's an advantage for us. And it's definitely something that our audiences understand. It's a big motivator for them when they choose to support the journalism. They know that money is going to fund journalism and it isn't going to enrich, you know, a proprietor or shareholders. And you as the CEO, you have limitations maybe that you might not because of some of the structural things, but at the same time, you don't have to worry about shareholders.

6:51So there's a little bit of a tradeoff there, right? Completely. Yes. I mean, the editor-in-chief and I report to the GMG board. She ultimately reports to the Scott Trust, which is a structural way of guaranteeing editorial independence and integrity. And the relationship is one that's described as a happy partnership, a happy marriage. And we're meant to be arm in arm. The commercial and editorial strategies and ambition are symbiotically intertwined. When you see the challenges of the Washington Post, I think that never has it sort of seemed more clear how actually the structural guarantee around that editorial impendence, it's a very significant thing.

7:37It's a very important thing. Hmm. Most legacy news organizations depend on ad dollars, even in the digital age. The Guardian's leaned on support from readers, supporters, although The Guardian is free. How do you get people to pay for something that's free? So, first of all, we also have advertising. Advertising is very important to us. However, you're right. We have the stability of essentially having built this now really quite significant global supporter base. One of the things that our ownership structure enables us to do is to be open about our publishing and available to all. So when we first started to build out our reader revenue model, it was optional.

8:27You're correct. It wasn't forced by being gated around a paywall. It was all about unlocking the words and the roots and the messages to essentially explain what reader support could give us and then to make it incredibly easy and frictionless. We do have some paid products, so it's not completely true that we are just completely free. If you subscribe to our app, we ask you to pay after you've used a certain amount. We have a cooking product, which we ask you to pay for. But we are committed to the principle of being open and freely available on the web. I talked on the show with your counterpart, your colleague at the New York Times, Meredith Coppett-Levian, who, you know, is also one of a handful of sort of legacy print outfits that managed to be thriving.

9:21And she talked a lot about lifestyle verticals. You mentioned cooking. She talked about cooking and games and other things. When you think about your business plan, do you track that sort of similarly? Or how much is your model more like a donation-based resource like Wikipedia? You're sort of straddling those two things. Yes, well, I have nothing but admiration for the New York Times and indeed for Meredith. And I have nothing but admiration actually for Wikipedia. And you're completely correct that I think we probably drew inspiration from both of those kind of, you know, august institutions.

10:00If you think about it, newspapers were the original bundle, a bundle of different verticals put together in a beautifully designed, elegantly delivered product. and we've always been good at cooking you know we've always been good at cultural content we've we've long been great at lifestyle we've always had games you know it's a very important piece of a newspaper to have crosswords um so in a sense as you think about um taking uh the areas that are defining of us and transitioning those into a digital world it's not really surprising that We end up, you know, kind of consolidating in the same sorts of areas.

10:38You know, puzzles are wonderful things. They're all about driving habit. You know, that's something that you want to do every day. It's really how do you best unlock your strengths that you have and use that to reach audiences and unlock the most value from those audiences around the world. You're also sort of leaning into and able, I guess, because of your structure to reinforce the mission of the organization, which allows you to sort of emulate Wikipedia, as we were talking about, right, to sort of have that loyalty be part of what the appeal is in supporting The Guardian? Whenever we do audience research, that sense of the emotional desire to support journalism is common.

11:22So people believe that the mission is important. They believe in the significance of the independent ownership model. There's a real sense of I'm supporting something that I value, but other people value too. Also, ultimately, it allows those people who can't afford to pay also to be able to consume it and have access to it, which is really important in this modern world. In terms of business model, several high profile media outlets have turned to billionaires for support. the LA Times, the Washington Post, Time Magazine. The tone that you mentioned earlier made me think that you may not feel like this benefactor model is necessarily good.

12:09I'm curious about that. I mean, the magazine where I worked as editor-in-chief Fast Company was owned by a single business leader who was quite supportive. But as you say, certainly the Washington Post is embroiled in questions around Jeff Bezos's commitment and pressure. I'm not sure it's for me to judge whether a benefactor model is good or bad. I think it has risks. And I think that for a long time, perhaps media organizations saw benefactors as saviors, that hope and belief that you could have benign, you know, kind of benefactors. I just think that there are moments when the personal interests of a benefactor may or may not come into conflict of a genuinely independent editorial organization.

12:53When The Washington Post and the LA Times quashed their 2024 U.S. presidential endorsements under pressure from the owners, the Guardian's U.S. editor, Betsy Reed, went the other way and sort of called them out in a fundraising pitch that raised something like$2 million. Yes. How do the editorial and business sides coordinate when it comes to generating funds? Like, is this something that you talk about or Betsy just decides I'm going to do this? No, it's very collaborative. I mean, I think it's one of the things that is so fascinating about the reader revenue model. And we've obviously got to evolve our language about that because they're much broader than readers now.

13:38But is the level of collaboration that takes place between editorial and the commercial teams. And in a way, it's the logical evolution of an organization away from a very siloed sort of church and state where you had editorial and you had advertising and they didn't really need to ever sort of, you know, come into kind of contact with one another. And I think that the essence of the audience funding model is that there is a greater collaboration. Ultimately, you know, Betsy would decide what she felt was the right kind of, you know, message, but it would be done in deep concert with the reader revenue side.

14:19And in that instance, like when that idea came up, was there any concern of like, oh, we don't want to, you know, pick a fight in that way? We talked about it, but in the end, it was something that we wanted to do. And I think it was the right thing to do. I think it was the right thing to do editorially and it was the right thing to do for our supporters. It was a very emotional moment. And that translated into a lot of people, I think, coming to The Guardian and choosing to support our journalism in a way that they hadn't before. The Guardian's known for its sort of unapologetically progressive values.

14:57And I'm curious how that impacts your business goals. I mean, some might say it colors trust in your journalism. So first of all, the lens that we are viewed through is interestingly different in the UK, where we have a long legacy and longstanding understanding about our editorial position. it's a much less entrenched view when you get into mainland Europe into the US into into the rest of the world and actually what I think our audiences appreciate there is very much this sense of a global perspective and so it's it's less I think about this this association with unashamed progressive values although I think that is the truth for us it's also the fact that we have a perspective that is very different and distinctive to a US-based kind of perspective.

15:53You know, Trump, the Iran war, tech, climate, immigration, there's something very appreciated by audiences of our ability to have a, you know, non-US sort of rooted perspective. The capacity to contextualize or frame the story that comes from also having a European perspective or a British perspective or an Australian perspective or a Canadian perspective. It's just that we can bring a broader context and a voice that is from, you know, many other places and not deeply kind of grounded and rooted in one place. The Guardian is such a distinctive operation. its business model, its broad context, as Anna describes it, even its openness about progressive values.

16:45So how are AI chatbots impacting its work? And what does Anna really think about Jeff Bezos' stewardship of the Washington Post? We'll talk about that and more after the break. Stay with us.

17:27Transcription by CastingWords hotels to companies that will finance your sushi order. We'll unpack the transformation of how business and consumers engage with our economy and figure out what lies ahead. Listen to Compound Interest from Semifor Business wherever you get your podcasts.

17:45Humans will never be more intelligent than AI. There's going to be two types of companies. Those are great at AI and those that went out of business because they weren't. How do we build a future that is human-centered? I'm Rana Elkhaubi, and on my podcast, Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future, and we take you behind the scenes of the AI that's transforming our lives. Find Pioneers of AI wherever you tune in. Hey, listeners, Bob here.

18:29If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely from Ford's CEO to NASA's administrator to the lessons from the Devil Wears Prada. It takes about 10 seconds to find. Just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.

19:06Before the break, The Guardian's Anna Bateson shared how its distinctive business supports distinctive content. Now she talks about how The Guardian has sidestepped the impact of AI chatbots so far and what Jeff Bezos misunderstood when he bought The Washington Post. Plus, the role The Guardian can play in the future of news and how she keeps the business anchored in the here and now. Let's jump back in. Before coming to The Guardian, you worked for Google and YouTube. The transition from search to AI chatbots, to things like Google's Gemini summaries, That has cut down traffic a lot for a lot of content outlets.

19:54And a lot of folks struggle with that. How are you thinking about that? Does that make you look at Google any differently? We have not seen declines in audience that have been reported for other media organizations. In fact, we've seen incredibly strong and resilient audiences, particularly in the U.S. we've actually just overtaken the Washington Post. So January and February for kind of readership within the US, which is quite a sort of significant moment from our perspective. So I don't think we're naive that there's clearly deep disruption and kind of change coming in the way that people are going to discover and then choose to consume the news that they want to kind of read or watch or listen to.

20:40However, we aren't seeing that level of change yet reflected in our audience numbers. Is there anything that you're doing? Like, are you blocking bots from AI companies from crawling your content? Or is this more, do you think, about the brand affinity that people have with Guardian? Do you have a sense of why it's not hitting you the way it's hitting others. There is a piece around brand affinity and around, you know, genuinely differentiated quality, original journalism, the meaningful relationship that I think our audiences therefore have with us, which allows us to potentially be more resilient, you know, and have more direct traffic.

21:23I think it is also about how the search experience is developing. There is a different experience around sort of hard news, serious news than there might be about softer lifestyle kind of media and coverage. The Guardian is a founding member of a coalition called the Strategic Partnership for Uplifting Rights, or SPUR, which is intended, I guess, to design better guidelines for AI training. Can you explain what the motivation behind SPUR is and what you've seen so far? At this time, when you are facing very well-funded and very sophisticated kind of technology organizations. We need to rise to that moment.

22:08We need to work together as an industry. So I think the first piece of it was how can we collaborate? And it's important that the founding members were both broadcasters and former newspapers, and they're across the political spectrum. We then have every intention that this will then broaden out and become a global coalition, defining standards and protocols that are really going to be necessary to the creation of a potential licensing market around quality journalism and content. We ought to be defining those standards and protocols rather than having them defined for us by technology businesses.

22:47We talked about your structure earlier around your business model. And I'm curious whether you think that structure gives the Guardian a certain kind of role in the media ecosystem and how it evolves? Do you feel like you have to be a leader in a different kind of way maybe, or it allows you to be a leader in a different kind of way? Yes, I think there is a sort of a sense of some responsibility. The secondary purpose of the Scott Trust is broader. If the primary purpose is ensuring the sustainability of the Guardian in perpetuity, a secondary purpose is around ensuring that liberal journalism can flourish.

23:28The leadership challenges of running any organization right now are quite intense. Are you thinking about your role within the Guardian differently? Are there particular things about how you manage the team or manage the planning that might be instructive? One of the most helpful things I was told by a rather informed board member was that even the most sophisticated engineers working in the most extraordinarily frontier level kind of AI don't really know what's going to happen in the next sort of 12 weeks, let alone in the next 12 months. And I found that really helpful, you know, focus on curiosity about kind of what's happening and capabilities within the organization and flexibility because you can you could spend you know weeks doing plans for the next five years which will become irrelevant and you know sort of redundant before you know it and actually not trying to do long longer sort of kind of forecasting or planning but actually thinking how do we set ourselves up equip ourselves skill up really to be an organization that's ready to kind of adapt and adjust as we're going to need to that's what i try and focus on and i think that as a leadership team, it's incumbent on us to sort of hang on to that humility and to continue to keep learning and be curious about what's happening.

25:04And that's what will, I think, equip us for what's to come. It's a very different framework than the traditional way business worked, right? I mean, I'm sure you still have to have plans and budgets that, you know, that extend out farther. But if really you can't see more than 12 weeks out, it's pretty hard to plan. Yes. I mean, well, it's easy to plan, right? Just you've got to be able to adapt when the plan begins to veer off course. There's a discipline and a rigor around planning, which is actually really useful. But I think it's being able to be adaptable enough that when the plan begins to change, you can accommodate that.

25:43When I first came into media in the late 90s, these organizations were making so much money, like hand over fist. And I sometimes wonder whether the expectations about how much money news organizations should make is a little out of whack. Like we're trying to turn them into growth businesses when they're really more cash flow businesses. And obviously, you don't have quite the same pressure of that because of the trust structure. But I'm just curious whether you feel that way or have any thoughts about that. I think you are correct in your observation. There was an expectation about the kind of returns that you could get that probably is unsustainable now.

26:28But also, I think if you're building a news organization now, you would build it in a very different way with a very different cost structure. And that might allow you then to be a growth business and to deliver the kind of returns proportionately that perhaps they used to. So it's both sides, isn't it? It's can you restructure yourself to adapt to a new reality? And also, can you culturally, you know, evolve sufficiently to be operating in a way that will allow you to grow? That's the thing that the New York Times has done so spectacularly well, which has allowed them to not only invest in journalism, but actually build out a very successful set of subscription-based businesses.

27:13I guess sometimes I think that, you know, when Jeff Bezos bought the Washington Post, he didn't really realize what he was buying and what he was getting into. I think that's probably right. There were years when you thought you were going to solve the problems by technology. And actually, the fact that that wasn't going to solve the problems was masked by the enormous sort of growth in audience and engagement that was Trump and then, of course, was COVID. You think you have the answers because you come in and you look at these businesses and you've been very successful elsewhere. And they're more complicated than that, you know, and they're complicated both because of legacy and because of the changing market.

27:53The expectations, right? I mean, listen, how much money the Washington Post makes one way or the other is not really measurable on Jeff Bezos's, you know, P &L, like his personal wealth. It's a rounding error, right? I suspect that it's less about the amount of money and it's more about what that kind of financial performance symbolizes about the sustainability and the health of the organization. You can live with losses, but if you feel that they are the sign of something that's more problematic, that I think then becomes the thing that's troubling. In some ways, I think it would make more sense for The Washington Post to be structured as a nonprofit.

28:38I know I talked to the owner at Fast Company at certain times about, you know, should we convert this to be a nonprofit? Because, you know, because really that's what its mission is about. But when you have folks who are owners who are business people, they believe that that profit imperative, you know, pushes certain kinds of results and gets rid of complacency. I have some sympathy for that perspective. A commercial ambition and drive, as long as it's compatible with and supportive of editorial independence, is a good thing to have. I think you're right. You don't want your organization to be complacent and you don't want people not to care really about kind of the commercial kind of underpinnings of where they work.