Wednesday, March 25, 2015

Toronto Star's Latest Venture Holds Hope For The Future

About 19 months ago, in August, 2013, the Toronto Star erected a paywall to improve its bottom line and allow it to improve services. At the same time Montreal’s La Presse launched an iPad app after having invested $40 million over two years. As a result La Presse has attracted a highly engaged younger audience who use the app for an average of 45 minutes a day and up to an hour on Saturdays. This is according to an article in the Huffington Post last November

Toronto Star publisher John Cruickshank was quoted as saying, “These are numbers we haven’t seen in the digital world at all to date.”

The Huffington Post also reported that the Torstar had signed a deal with LaPresse to develop a new tablet product for the Star at a cost of up to $14 million.

Like most papers, the Star has seen revenue for print advertising decline. On a year over year basis ad revenues have declined 20.5%, which is quite a lot.
On March 7th the Toronto Star announced in a “Note To Readers” that it was removing its paywall as of April 1st  It made the move after “extensive input from our readers and our advertisers.” Translated it means the paywall wasn’t working as well as they had hoped. (Ironically while looking at the note a message came up saying that I had 7 free articles left, out of 10, to view before I had to buy a subscription.)

The newspaper business reminds me too much of such failed companies as Baldwin Locomotives and Eastman Kodak. Baldwin was famous in its field as a builder of railway engines. Despite having pioneered in building railway diesel engines, it continued to focus on steam long after other builders had moved on. Kodak was the same in photography. It continued to concentrate on film, despite having pioneered in digital photography, and went bankrupt. Today it is just holding on.
The newspaper business is too much like these businesses. Newspapers pioneered in the use of the Internet and yet have failed to capitalize on it. Hopefully the Toronto Star’s new venture will succeed. We need the Toronto Star and we need newspapers.