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Five questions with André Desmarais on making La Presse a not-for-profit

Canada’s billionaire Desmarais family is preparing to end five decades of news-media ownership and turn francophone publisher La Presse from a business unit of Power Corp. of Canada into an independent, not-for-profit news organization. André Desmarais, deputy chairman and co-chief executive of Power Corp., reflects on the state of rapid changes in the media industry.

Why was now the right time to change the structure at La Presse?

I think just the number of things came together. It became apparent to us that Google and Facebook were really taking a huge, huge part of the advertising revenue today. And if you look at the revenues of the paper industry … it really is disconcerting to see that unless something is done here, you’re just not going to succeed.

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We really came to [the idea to leave La Presse with a $50-million financial contribution] over a number of discussions over I’d say the last year, but one of the things that [influenced us was] the federal government’s budget, which mentioned the fact that, in essence, they didn’t want to give money to individuals who had a lot of money or corporations. I can understand that. They’re a government and they’re not in the business of doing that.

Our advertising was held onto better than many of our competitors who have suffered more than us. But it’s still not enough and if you’re going to give a quality product, which is what we would like to give, then we had to figure out a way to do that and open it to the public.

What’s your vision of the future for media companies in Canada, in terms of ownership models?

I think it depends. If you’re looking at newspapers, which is what we are looking at here, I think that’s a pretty tough slog, personally. I really do. And I think it becomes more of a societal issue of whether or not you want to have, and need to have, written press, opinions, editorial. … I think that’s a very important part of identity, and I think the written word is perhaps the most important of all.

And so it is under tremendous attack right now because of Google and Facebook, because they’re able to get the advertising and take it away from us completely. I don’t think there’s any printed group that will survive, in my opinion, because in order to survive you have to have the size, which can allow you to have paywalls that are large enough to generate the profitability necessary. Because as soon as you have the paywalls, you get into a situation where you get less people than if it’s for free. ... The other thing is that the people who want to pay are 60 and above − the average age is 62.

But what about the advantage of having a large regional market share? There’s not a lot of competition in the French-language media.

There’s not, but the problem is the advertising dollar and the amount of people is so low that I can’t get paywall numbers up high enough to be able to run my paper, that’s the problem. I mean, if there were 50 million French Canadians, I might have a better chance.

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If La Presse could have broken even financially, would you have kept it?

I’m not sure. I really think that this is a very important positioning for this paper for the future. It won’t necessarily succeed ... but, it’s in a much better position to be able to succeed. So, break-even is not good enough, in my view, to stop a decision like this. Because break-even one year, is a loss the year after, maybe. I don’t know.

If it doesn’t succeed, would you step in again?

I don’t know whether we’ll step in again. I’m not going to go under the basis that it doesn’t succeed. I’m going to go under the basis that we’ve given $50-million dollars, and that we’ve taken [over approximately 1,300 La Presse] pensions, which takes away a lot of money that they don’t have to put in. The paper has got great readership, it’s hugely popular. It needs a mobile app that is going to permit the youngsters to be a much more important [group] than they are today. We have less mobile app readers today than we do iPad readers, which is just not right.

This interview has been edited and condensed.

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