Torstar Corp. plans to remove the paywall at the country’s largest newspaper, the Toronto Star, next year to coincide with the launch of a new tablet edition.
The owner of the Toronto Star and other publications said its main focus is on delivering content across multiple platforms — a move it’s betting will attract more readers, and bring national advertisers back into the fold.
“This is an important strategic step forward for the Star and for Torstar as we commit to our future of cross-platform, a future that we recognize will be increasing mobile,” Torstar president and CEO David Holland told analysts during a conference call Wednesday.
Torstar has signed a deal with La Presse to develop a new tablet product for the Toronto Star based on the technology and experience the Quebec publisher developed when producing its own publication for the iPad in 2013. The company invested a reported $40 million into developing La Presse + over two years.
Executives at Torstar have been encouraged by the success of La Presse has had with its tablet product, and said by partnering up with the company, it will be able to create a joint marketing opportunity that will lure national advertisers who will be able to access both English and French readers.
The tablet version has also been able to attract a highly engaged, younger audience.
The company said readers of the La Presse tablet are using it for an average of 45 minutes a day, and up to an hour on Saturdays.
“These are numbers we’ve haven’t see in the digital world at all to date. We’re tremendously excited about that,” said John Cruickshank, publisher of the Toronto Star and president of the Star Media Group.
Torstar expects to spend $1 million to $2 million in the fourth quarter on the project and an additional $10 million to $12 million in 2015.
Like other newspaper publishers, Torstar has been struggling with declining print advertising revenues, which they expect to continue into the fourth quarter.
However, the company said multi-platform subscriber revenues and flyer distribution revenues are expected to be relatively stable in the balance of the year.
Torstar said it had a third-quarter profit of $125.3 million due as the sale of its Harlequin romance book business boosted its bottom line. That compared with a loss of $70.9 million a year ago.
Excluding the sale of Harlequin, the company reported a net loss from continuing operations of $87.0 million in the third quarter compared with a loss of $80.2 million in the same quarter last year.
Operating revenue slipped to $199.9 million from $215.7 million in the third quarter of last year.
Torstar sold Harlequin to global media company News Corp. for $455 million. The company used the proceeds from the sale, which closed in August, to pay down debt.
Holland said it doesn’t have any plans to use the money to “double down” or invest further in the newspaper industry.
Along with the Toronto Star, Torstar publishes the Hamilton Spectator, Waterloo Region Record, the Guelph Mercury and more than 100 community newspapers in Ontario.
In addition, Torstar owns Free Daily News Group Inc., which publishes the English language Metro newspapers in several Canadian, and several digital businesses including Toronto.com and Workopolis.com.
