Bonus post: Yes, quality journalism pays

elDiario.es, a startup in Spain, ranks among leaders in audience and paid reader support in that country. It grows organically and has no debt.

You’re reading the My News Biz newsletter. My goal is to help digital media entrepreneurs find viable business models.

The 2024 Digital News Report of the Reuters Institute for the Study of Journalism arrived in my mailbox a week ago. At almost the same time came the latest financial transparency report of elDiario.es, a daily investigative news outlet in Spain. Both told the same story in different ways.

Ignacio Escolar, founder and CEO of elDiario.es

First, highlights from elDiario.es

• The 11-year-old startup reported 2023 revenues of $14.8 million, $7.6 million from advertising (converted from euros). Most of the rest came from reader contributions.

• It spent $13.3 million, and had a surplus of $1.5 million. The publication is debt-free.

• The number of paid readers grew more than 40% in 18 months, from 60,000 to 87,000. It’s a free publication, so these payments support independent journalism. (I’ve been a paid contributor for several years).

• elDiario.es launched with 12 journalists in 2012. Today it has 132 employees, 90 of whom are journalists.

• A third of the profit was distributed among the shareholders, nearly all of whom were founders or are current employees. The surplus is reinvested or held in reserve.

Among the most read

The Reuters report looked at the state of digital journalism in 47 media markets on six continents. It included a detailed report on Spain, prepared by my former colleagues at the University of Navarra.

The survey showed that elDiario.es ranked fifth among Spanish news media in weekly reach. That is based on the number of people who consult a website at least once a week. The four media ahead of them were a national TV broadcaster and three national news publishers.

This high ranking is confirmed by another independent study. According to AIMC (the Association for Research on Media), a consortium of advertisers and ad agencies, elDiario.es ranks 3rd among the most-read general news media in Spain (headline in Spanish below). The two media ahead of them are long-established newspaper publishers.

AIMC performs a service similar to the Alliance for Audited Media in the U.S. It ensures advertisers that media have the audience they say they do.

elDiario’s CEO commented that this high ranking by AIMC was even more remarkable since the publication doesn’t cover sports or celebrity gossip, an audience staple of Spanish media.

How trustworthy

The Reuters survey asked respondents to give a trust rating to 15 media. The question was, “How trustworthy would you say news is from the following brands? Please use the scale below, where 0 is ‘not at all trustworthy’ and 10 is ‘completely trustworthy’.”

The researchers coded a score of 6–10 as trustworthy, 5 as neutral, and 0–4 as untrustworthy. Those that hadn’t heard of each brand were excluded. (More on how Reuters asks about trust in news brands here).

Survey respondents gave elDiario.es a score of 40%, with 34% judging them as neither of the two extremes. The highest trust score among the media was “your regional or local newspaper” at 54%, just above the national public broadcaster, RTVE, at 53%.

Independent but progressive

elDiario’s bylaws prevent them from accepting more than 10% of their revenues from any advertiser “in order to guarantee that the editorial line is independent and does not respond to hidden interests.”

In 2023, 4% of their revenues came from government sources of all kinds, including advertising from the postal service, lottery, national airports and railroads, and nationalized tourist hotels. The total received is “less than the great majority of media,” says founder and CEO Ignacio Escolar.

elDiario.es promotes a “progressive” agenda, which includes separation of church and state. Spain is a religiously conservative country, and the Church has played a role in politics. It supported the dictator Francisco Franco. This may, in part, explain the publication’s mediocre ranking in terms of trustworthiness.

A final thought

I lived and worked in Spain for seven years, met and interviewed many media leaders of every stripe, and consumed voraciously the print, digital, and broadcast media. I came to admire many journalists and their work.

I consider elDiario one of the best. It offers others a model of how trustworthy, independent journalism that holds the powerful to account can be profitable. It requires a laser focus in editorial — not reporting the same stuff the same way everyone else does — and it takes financial discipline.

The astonishing 40% growth in paid readers over 18 months is an eloquent endorsement of journalistic quality. Escolar attributed the growth to a series of investigations that revealed corruption, fraud, and systematic lies and misinformation by political and business leaders.

Personally, I found those reports impressive in their depth, breadth, and the relentlessness of the reporters’ research. The daily podcasts described these investigations in detail as well.

This is why I listed elDiario and Escolar as Reason for Optimism #11 last October. Optimists get into action to change the world. Pessimists believe there’s nothing we can do about it. I believe the pessimists are wrong.

Previously: Embarrassing to admit: I avoid the news (sometimes)