The owners of Canada's largest French-language broadsheet newspaper won't rule out eventually charging readers to access its online publications as consumer preferences increasingly shift.
“We're obviously monitoring everything and our people, I think, owe it to our employees to try and find ways to ensure La Presse survives and continues to be the important media that it has been for this province and indeed for the country,” André Desmarais, president and co-chief executive officer of Power Corp. of Canada told reporters Thursday.
Power Corp. subsidiary Gesca owns Montreal La Presse and several other French-language newspapers in Quebec and Ontario. While La Presse is the largest full-size French-language paper, its circulation is surpassed by the Quebecor Inc. -owned tabloid Le Journal de Montreal.
Several newspaper publishers have mused about charging for access to their digital websites but few have successfully found ways to make money.
The parent company last year gave Gesca about $100-million to pay off its bank debt. The move was part of a broader restructuring that also involved employees making concessions.
Mr. Desmarais said the changes have created a new foundation to confront what could be difficult challenges for the industry in the coming years. In addition to dwindling advertising revenues, newspapers across North America face reduced readership as young people turn to the Internet for their news.
While Mr. Desmarais hopes printed newspapers will survive, he said there could very well be a change in how information is distributed.
“A lot of people of my age still like to read their paper and touch it, but I'm not sure that's what the young will want in the future. So you have to adapt to what customers want,” he said following Power's annual meeting.
Earlier Thursday, the company reported its first-quarter profit surged to $224-million from $151-million a year earlier on strong performance across its various businesses.
The Montreal-based firm, which counts among its subsidiaries Power Financial Corp., said its operating earnings rose to $381-million from $252-million, driven by a higher contribution from Power Financial but partly offset by a lower income from investments.
Revenues jumped to $9-billion from $5.6-billion in the same period a year earlier, when it recorded a loss in the change in fair value on held-for-trading assets of $1.97-billion.
Paul Desmarais Jr., co-CEO of the financial and media conglomerate, told shareholders that governments and companies have their work cut out for them to regain the public's trust that was shattered during the Wall Street financial crisis that triggered the global recession.
“While trust has begun to be restored, we're a long way from where we were before the crisis,” he said.
Mr. Desmarais said the financial crisis of 2008 and 2009 shattered the foundations of trust on which the financial markets were based.
Wall Street banks were hit with massive losses during the recession after they were caught with hundreds of billions of dollars in worthless loans and risky assets tied to the battered U.S. housing sector. Many were taken over by the U.S. government and bailed out to avoid a collapse that would send the economy into a depression.
Other U.S. banks consolidated or were wound up by regulators.
Recently things had begun to settle down in the sector.
But reports emerged Thursday that New York's attorney general had launched an investigation into eight banks to determine whether they misled ratings agencies about mortgage securities. A source said that Attorney General Andrew Cuomo was trying to figure out if banks provided the agencies with false information in order to get better ratings on the risky securities.
In Canada, the big banks came through the recession in much better shape, in part because they avoided risky practices and the Canadian housing market remained relatively strong.
Mr. Desmarais applauded the Canadian government for advocating a gradual, measured approach to required regulatory changes in financial services.
“Trust and confidence is a crucial issue so I think everything should be done in a gradual way and I sense Canada is doing that,” he later told reporters.
“I sense that many other countries are having more difficulties than we are and I think our system, in that sense, is being well served.”