Telex's first-ever transparency report

November 19. 2020. – 03:51 PM

This is not just our story. It is yours too. As promised, here is the first transparency report of Telex.

As prescribed by law, our books currently contain our financial results up to the end of September, and this transparency report also pertains to this period. Financial data from October will be published in our next transparency report.

In Hungary, it is unusual for a media company (or for that matter, any) to present more detailed information on their financial situation and spending than what mandatory. But since our story is rather unusual as well, and the money we spend on Telex is from our supporters, it feels obvious that we must let you in on the details of our finances and our strategy.

Because this is not just our story, but the story of our supporters too, and transparency is one of our core values.

What we are the proudest of, besides our supporters of course, is our independence. We are grateful that thanks to the more than 41 000 donors, we do not depend on any political or economic powers, we are not beholden to anyone but ourselves and our readers. This is a magnificent feeling for which we cannot thank our supporters enough.

And the support we get is critical: without it, Telex would not exist. Before we launched our site, we thought that our skills, independence, authors, and news are needed, but it would only be feasible with direct support from our readers. A newsroom, especially a newsroom this size, is incredibly resource-intensive. We are still in our development phase, but we are getting better and stronger each day, we are making constant progress, and we will use every penny we receive to this end. We are astonished by the number of people rooting for us, thank you all once again.

But now, let's take a look at where we are at this point!

Timeline

Resigning, launching a Facebook page

On 24 July, nearly the complete staff of Index.hu Zrt. had resigned after it became apparent that we can no longer work there independently. We launched a Facebook page called the "Outgoing Index staff" that same day, which, over the following months, became the most important line of communication with the people who are on our side, but we did not only use it for that: we also reported the news until we got our site up and running, publishing more than 50 articles there including several exclusive pieces that were widely quoted.

Founding a company

Márton Kárpáti, former deputy editor-in-chief of Index, founded the publishing company of Telex.hu, Van Másik Kft., on 31 July, the day when all legal ties binding him to our former workplace were finally severed. Veronika Munk joined him on 24 August, becoming the editor-in-chief of the new site. With the help of some enthusiastic volunteers and the community offices of Kaptár, the preparations were on the way for launching Telex.hu.

Building the site

After getting Márton Kárpáti's brother, András, on board, we began building our donation page and the news site itself – work on the latter is still ongoing. Our goal was, and still is, to create a website that keeps getting better and more innovative. In October, several former members of Index's developer team also joined Telex.

Launching our fundraiser

We revealed our new site's name on 4 September, and on the same day, we started collecting donations. In just a few short hours, 10 000 people had already pledged their support, and within five days, that number ballooned up to 25 000 and kept on steadily growing ever since, surpassing 41 000, making Telex.hu's initial donation campaign the most successful fundraising effort in the history of Hungarian press, all thanks to you, our founding supporters.

Reassembling the team

Van Másik Kft. hired the first group of former Index employees on 11 September. By 30 September, we already had 50 employees and signed our regular external authors on as well by October.

Planning, organising, negotiating, procuring

Throughout September, we were hard at work on building the site, developing our workflow, writing articles, selling ad spaces, and hitting a deal with the provider of our ad servers. We devised a business plan and started drafting our mid-term strategy. We had several meetings with Hungarian and international companies and private individuals who were interested in Telex. We began buying all the equipment necessary for our daily work such as computers, cameras, video cameras, etc. We found a small flat furnished as an office that we could rent and start working immediately.

Writing our Code of Conduct

We laid down our journalistic values and rules of conduct in our code of ethics, and we are keeping ourselves to it. We have also published this document to maintain accountability and make it clear how we work and why we work. This is also quite unusual in Hungarian media.

Launching the site

A mere nine weeks after walking out of our previous workplace, we launched Telex on 2 October.

We are still at the start of the road, and we are full of plans and ideas. We are putting together our mobile app, we just finished our live-blogging feature, we are working on having podcasts, blogs, formats suited for larger pictures, and if all goes well, we will be expanding our staff as well.

The dry numbers

We received nearly 319 million Forints (~€900 000) from more than 41 000 wonderful supporters. This is a great sum and it comes with great responsibility. As we promised, we are spending all of this money on content-creation and providing the necessary conditions for work.

According to our current plans, this year, our operation will cost us 55 million Forints (~€150 000) per month. We spent less in September: given the fact that our employees weren't hired at exactly the start of the month (and some arrived even later), our wage-related expenses were lower, and we did not have to pay the complete monthly fee for services like photo agencies and newswires either, and we had nearly no phone bills yet. The site development's costs are not included yet in the report below.

So at this cost level, with the donations we received up to this point, we have a good five or six months of secure operation. But we have long-term plans, which is why we are especially grateful for our regular supporters, and that is also the reason why we are seriously looking at a subscription-based model besides getting revenue from advertisements. We want to expand and make progress, so we are expecting our monthly expenses to grow significantly in the coming year.

Incomes since the start of the company until 30 September (in thousand Forints)

Revenues (subscription fees, ads)0
Donations318 923
Interests, foreign exchange gains1

Expenses since the start of the company until 30 September (in thousand Forints)

Material costs (low value technical devices, office equipment, cleaning products)147
Content (freelancers' fees, photo agencies, news agencies)788
Marketing and advertising costs (Facebook, Google)68
IT services1580
Telecommunications services (internet, phone)12
Wages and wage-related expenses19044
Operational costs (rent, utilities, printing)495
Financial expenses (legal and accountants' fees, payrolling, business tax, contributions)290
Other costs (insurances, bank fees, credit card commissions)884
Investments (computers)4329

Number of employees

50 people, of whom

  • 47 work full-time,
  • 1 works part-time with 6-hour shifts
  • 2 work part-time with 4-hour shifts

(We hired ten more full-time employees by the end of October.)

Frequently asked questions

Surely there were cheaper laptops/offices/etc, why didn't you go for those?

We carefully weighed all available options when it came to our purchases, and we strived for finding solutions that are the best, quickest, most flexible, and the cheapest in the long run. For instance, we did not buy used electronic devices, as new ones are more reliable. One of the strongest arguments for our current office was that we did not have to pay a deposit, and we did not have to commit ourselves for a fixed lease term. By the way, the office itself is rather small for our staff, but with the pandemic going on and home office becoming a regular thing, it didn't even occur to us to look for an office where everyone can have a desk at this point. At the same time, operating a news site that requires a ton of creativity and teamwork is not particularly efficient if you only work remotely, so some sort of office space was vital.

You are raking in all this cash from your donors, why do you still have ads on the site?

We want as many legs to stand on as possible, and we want multiple revenue sources to ensure our continued existence. As you can see, our pages are not overflowing with ad spaces, and we will keep them at a tolerable amount in the future as well.

Is it true that you are getting huge donations from a truckload of wealthy Hungarians? How many have supported Telex with millions?

The only seven-figure donation we have received so far is 2.5 million Forints. Nearly 30 supporters have sent us six-figure donations. (As we told you earlier, the Czech media firm Economia has pledged to donate €200 000, but that transaction is yet to go through still.)

The counter on tamogatas.telex.hu still displays 37 000 or so supporters, yet here you're saying that more than 41 000 people have donated. I sense a discrepancy here. Why is that?

The counter on the donation page only registers credit card donations made via the SimplePay systen, but there are others who supported us through paypal or just wired their donations directly, and with all of them included, the actual number is above 41 000.

So you have 41 000 readers?

Well, at least that many, we hope. But it seems there are far more people interested in what we do: Telex first showed up in the industry-standard audited audience metrics of DKT/Gemius a month after the site launched. On 4 November, as the US election process was in full swing, we had more than 467 000 individual visitors generating more than 3.8 million pageviews and spending more than 11 minutes on the site on average. On 9 November, when the Hungarian Government announced more stringent restrictions to curb COVID-19, 545 000 people learned about them on Telex.

Is this report a one-time thing, or will there be more?

As right now, we fund ourselves primarily from donations, and since it will always be true that we could never have started without them, we will always remain transparent. We will publish a transparency report at least every six months, or if justified, every quarter.

Earlier, you said that your employees will become proprietors in the company. What's up with that?

That will surely happen, we are in the process of finalising the details. In our next report, we will tell you everything about the model under which our publishing company will operate.

I have more questions.

And we have more answers. If you want to learn more about Telex, contact us at [email protected] (or if you are a colleague, at [email protected]) and we will do our best to address your inquiries.