Can the tablet help revive the print industry?
Taking a look at the potential for success for the mobile device as Toronto Star prepares to follow the path of La Presse with a major investment in a tablet edition.
Earlier this month the Toronto Star unveiled plans to hire 60 journalists and designers to staff its tablet edition, giving impetus to the pub’s long-term strategy of building a successful mobile product.
It signals a change in direction for the paper, which is removing its paywall two years into that strategy. But can it afford to be so bullish about the tablet?
Executives said in November it would cost TorStar $1 million to $2 million in 2014 and an additional $10 million to $12 million this year to launch its tablet. In its most recent quarter, the Star’s digital revenue was up 4.4%, representing 13.2% of total revenue. The company posted an overall profit of $125 million for the quarter, boosted by sales of its Harlequin division. Print ad revenue, on the other hand, was down nearly 21%.
Other companies’ experience with the tablet indicate there is potential.
For instance Postmedia, which announced digital ad growth of $700,000, or 3% in its first quarter report this month, has seen digital revenues increase by 25% to 30% in markets where it launched it its “re-imagined” four-platform strategy, which includes a distinct app for smartphones and tablets.
And it’s been good news at Montreal’s La Presse, which is developing the Star‘s new tablet edition. The company has invested heavily in its tablet product La Presse+ since its launch in 2013 and is now able to charge rates similar to the paper, says Simon Jennings, Toronto sales group president, La Presse.
New numbers released on the weekend by La Presse, drawn from third-party app measurement company Localytics, peg its tablet readership during the week of Jan. 5 to 11 at 438,372, assuming 1.5 readers per tablet. Compare that with with 301,510 readers during the same week in 2014. The AAM has certified La Presse+ systems, processes and metrics for serving and measuring ads.
Average engagement time with La Presse+ is now 44 minutes per day during the week, 73 minutes on Saturdays and 50 minutes on Sundays, Jennings says, while the average age of readership for the tablet has been skewing younger since launch, with 65% of its readership now in the 25 to 54 range, 7% 18 to 25 and the remaining 28% in the 55-plus range.
According to a June 2014 study by Montreal-based measurement co CROP, 57% of La Presse+ readers polled said they “appreciated” the tablet ads “a lot/enough,” with 34% saying they enjoy them “at least a little.”
Jennings says “north of 40%” of all the paper’s revenue now comes through the tablet.
“The industry is seeing a younger but loyal and quite affluent large audience in French Canada, spending a boatload of time on this,” Jennings says. “When you equate that to what the value of an ad is, we are able to preserve the rates.
“That supports a sustainable model for a company that wants to continue to put hundreds of journalists out there to try and figure out what is going on and provide decent content.”
Jean Francois Renaud, a partner and co-founder at internet marketing company Adviso, says a full page ad in the tablet’s main section costs around $10,000. He says while he isn’t sure whether the strategy will prove a success in the long run, he says that the company is providing advertisers with a good platform to reach readers.
“No one can say they have found the model to making content profitable online,” Renaud says. “But one thing we can say is they are trying something.
“This is more of an anecdote but we hear that people bought a tablet just to read La Presse+,” he says. “Once they switch, they are not going back to the paper.”
Judy Davey, EVP Activation Zenith Optimedia Canada, says that based on the increase in tablet ownership in the past year in Canada, there is a growing audience for tablet-specific news content. Stats from market research firm Globalwebindex, shows that in Q4 of 2014, 45.3% of Canadians owned a tablet, compared with 32.6% in 2013.
Data provided by Zenith, with clients like Kia and Hyundai advertising in the Star, show that in the 45-to-54 demo, 1,788,615 Canadians owned tablets in 2014, compared with 1,016,440 in 2013, an increase of 76%.
The 25 to 34 demo saw an increase of 23.3% while 34 to 44 was up 57%, and 55 to 64 rose 35.6%.
“That’s right up the Star‘s alley,” Davey says.
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