Postmedia ventures into startup territory

The publisher has teamed up with a Waterloo-based tech hub to build a more sophisticated digital offering aimed at SMBs.
Postmedia innovation hub

It’s an unlikely partnership. Canada’s long-established and largest newspaper chain has tied up with a Waterloo-based innovation centre that helps new technology ideas blossom.

The agreement with Communitech will see the opening of a new Postmedia digital development lab within the centre where the company will focus on developing and refining digital products and services.

The tie-up between Postmedia and Communitech’s innovation hub is a sign that the company is looking to drum up new revenue-generating ventures to fortify its crippled legacy business.

In a release on the news, Postmedia’s EVP and CCO, Andrew MacLeod, stated that the agreement with Communitech would “help jump start a new team with new ideas to set new, higher benchmarks for success.”

Communitech, which helps over 1,000 tech companies, assists in building brand new ideas or helping older companies advance their tech game by being (in its own words) a kind of “farmer’s coop for business.”

Postmedia’s president and CEO Paul Godfrey has gone to some lengths to describe the challenge his business faces. Weighed down by massive debt and continuing ad spend declines (for both print and digital), Godfrey has appealed to the country’s Heritage Committee to intervene and support the business of news through a pipeline of support (such as tax credits or funding). He also told MiC that his goal is to develop a stack of differentiated revenue streams so that the business model is not entirely dependent on advertising revenue and subscriptions.

The partnership with Communitech is clearly part of this diversification strategy. Through it, the company seeks to develop “digital possibilities” for small and medium-sized businesses, focusing on product development and new digital solutions.

The venture will launch in the fall and the company is scouting for two new members to join its team: an innovation manager and a development lead.