Is La Presse+ model the way forward for news?

Industry insiders weigh in on the impact of the Quebec publisher's decision to shut down its weekday print editions.
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By Val Maloney and Sonya Fatah

Though long-planned, yesterday’s announcement that La Presse will be ceasing weekday print operations in 2016 created a ripple in the media landscape.

The company’s plan is to stop printing the weekday edition, and to continue to push readers to its successful La Presse+ app, which now has 460,000 weekly readers. The publisher will continue to print its Saturday edition, noting that the weekend edition remains an effective product for readers and advertisers.

Despite talking about phasing out the print product for some time, Simon Jennings, president, La Presse Sales Group, says yesterday’s announcement was still met with some “really?” comments from clients and partners.

David Cairns, partner at Cairns Oneil, is calling it “the start of the end of print in North America,” and perhaps globally, while praising La Presse for leading the transformation into a digital-first media company.

In August this year, Ken Goldstein of Communications Management, a Canadian media advisory company issued a paper foretelling the death of print. The paper, titled “Canada’s Digital Divides,” forecasts that, by 2025, there will be few, if any newspapers left across Canada. La Presse’s announcement gives heft to that perspective.

Cynthia Rubino, head media investment at Novus Canada, says the move is a bold one. “Everyone has been talking about ceasing publication but they are the first ones to actually do it.”

Others in the industry, like Christine Wilson, SVP at Starcom MediaVest Group, thought the change was overdue.

“I am a little surprised it took this long,” she says. “We thought it would happen before the end of the year. They talked about the road to ceasing the print publication, and once the platform took off we expected the print entity would cease to exist around the fall.”

The timing of the announcement is interesting, says Rubino, who says she believes that La Presse+ probably didn’t deliver to the publishers’ expectations when it first launched. Clients in English Canada have not embraced La Presse+ to the same degree as their counterparts in Quebec because of challenges of adapting technically to the platform. “Clients here have been wary of the product and we will see if that changes with the introduction of the Star’s tablet.”

The decision to retain the Saturday print product was met with mixed responses. Cairns finds it an odd decision when the media company is migrating users to the app for the rest of the week.

“If you want the market to use the app five days a week then I don’t know why the weekend reader would be any different,” he says. “If you’re using the app through the week I don’t know why you wouldn’t on the weekend.”

Rubino, however, feels that the decision shows that the company has not entirely lost faith in print and recognizes the value of weekend advertising revenue, which also benefits from brands reaching customers through flyer inserts.

La Presse is owned by Gesca Ltée, a subsidiary of Power Corp. of Canada, and as a private company, doesn’t disclose numbers. But, Jennings says 70% of La Presse’s revenue is digital, and 60% of that is directly attributed to advertising revenue from La Presse+, with the other 10% coming from the company’s other digital platforms.

“We have done a really good job at migrating the business away from the print paper, we wouldn’t have done this if we hadn’t made a data-driven decision,” says Jennings of the decision to cease weekday print operations. “We waited until we had a material piece of the business migrated over to La Presse+ in real dollars before we pulled the trigger.”

Jennings says the La Presse team expects the other 30% of revenue at the company to migrate away from print and towards digital before 2016, noting they aren’t planning to operate in a deficit next year.

There will be La Presse staff impacted by the decision, those details will be shared with workers and unions on Sept. 24.

Other job losses will also be seen at Olive Media, which is being absorbed by La Presse and the Toronto Star at the end of the year to serve the teams at those companies on the ad side. The Olive Media acquisition will see the elimination of 70 positions at the company’s Toronto office and 12 positions from its Montreal office. Some staff affected will be absorbed by the Star and La Presse.

While print advertising has been dropping steadily across the industry, paper and digital CPMs at La Presse are about the same, says Jennings, adding rates range from $40 to $150. Wilson notes that a drop in reach with the loss of the print product could mean CPMs at La Presse+ will go up, adding her team will keeping an eye on those changes.

Jennings says yesterday’s announcement was a mark of success for La Presse, noting he hopes the Toronto Star sees similar results from its Star Touch app, which it launched using the Quebec media co’s model.

“Our belief is that there is no future in print, due to the infrastructure costs and the aging and non-replacing demographics,” he says. “We believe this is the way to go and provides a model for journalism to succeed. I would like to think we are leading the way for other publishers to continue to operate and have a viable model.”

The real question, of course, is whether or not this strategy will survive. Goldstein asks the question: “Will the current news brands be able to make the transition to the new online-only business model or will they have to disappear to allow something else to take their place?”

Stay tuned.