Quebecor Inc. is shaking up the slumping Sun newspaper chain as some of its flagship dailies are increasingly being squeezed by the growth of free commuter papers, including its own publication, 24 Hours.
The Montreal-based media giant is embarking on an ambitious digital strategy aimed at breathing new life into its television, newspaper and Web operations, starting in Toronto where the company's biggest newspaper has seen its reader and circulation numbers eroding.
Quebecor chief executive officer Pierre Karl Péladeau said the model for newspapers needs to change if publications want to attract younger readers.
In a pair of moves Tuesday, the company announced plans to link its newspaper, Web and TV network in Toronto more closely than any other company has in Canada so far.
If successful, the strategy could be spread across the company's operations.
Quebecor also installed a new publisher at the helm of its largest newspaper, the Toronto Sun, which has seen its readership and circulation erode faster than its competitors in recent months.
The company plans to stream broadcasts from its Sun TV network in Toronto over the Internet, letting viewers contribute their own video footage to news programs, while also allowing them to see inside editorial meetings at Toronto Sun offices where news decisions are made.
The strategy will also tap into blogs and other forms of user-generated content, Mr. Péladeau told a gathering of advertisers in Toronto, who were given their first glimpse of the direction he wants to take the entire company over the next few years.
“I think there is no other future for conventional media . . . than to migrate to this model,” Mr. Péladeau said after the presentation. “Probably this was something that [media] convergence was all about a few years ago.”
The change in tack comes less than a week after industry data showed weekday readership sinking at some of Quebecor's biggest daily newspapers.
Audience numbers have fallen in both Toronto and Montreal, where paid newspapers have contributed significantly in the past to Quebecor's profit.
Circulation in Toronto has also dropped faster than at its rivals, an industry study revealed last week.
“Certainly something needs to change that will make newspapers interesting for a younger generation,” Mr. Péladeau said. “Doing commodity news like the way the newspapers were doing previously is certainly not a model of the future.”
Mr. Péladeau said Quebecor will spend the next six months testing the digital revamp.
Analysts have suggested the company has found itself at a crossroads where the rapid growth of free daily commuter papers over the past year, including Quebecor's own 24 Hours, has hurt its paid publications.
Weekday readership at 24 Hours in Toronto has soared more than 13.5 per cent in the past year — more than any other daily publication in that market, according to Newspaper Audience Databank Inc.
But a considerable portion of that growth has come at the expense of The Toronto Sun, analysts suggest, because the publications are both chasing similar commuter audiences.
“They were the ones that were most at risk,” said analyst Carl Bayard at Desjardins Securities in Montreal. “And I think what we're seeing now is bearing that out.”
Weekday readership of the Toronto Sun fell more than 17 per cent in the past year, while weekday circulation dropped 4.7 per cent. The company saw a similar slide in Montreal, where readership at Quebecor's commuter paper 24 Heures also rose faster than the company's paid publications.
“They are trying to do things to reverse the momentum,” Mr. Bayard said. “The readership and the circulation figures are very poor. And that is definitely a cause for worry.”
Mr. Péladeau said he is not concerned that Quebecor may be cannibalizing the readership for its paid newspapers with the introduction of free publications. Several free papers have launched in major cities across Canada over the past few years, including Dose, Metro and 24 Hours, which has a weekday readership of nearly 350,000 in Toronto.
Quebecor also installed Kin-Man Lee at the helm of the Toronto Sun, taking the reins from former publisher Neil Fowler.
Mr. Lee is a 17-year veteran of the company who recently served as corporate controller.
One industry analyst, who spoke on condition of anonymity, said the move may suggest an increased focus on the newspaper's costs, at a time when its profit has also fallen.
The Toronto Sun recently reversed a weekday price increase from 50 cents to 75 cents in an attempt to jump-start readership.
Mr. Péladeau said the company has not considered giving the paper away, but suggested some publications may eventually take that route.
“We're not there yet. And I'm saying yet because we don't know what the future will be all about,” Mr. Péladeau said.
