In a shrinking industry, and on a struggling island, the Chronicle Herald, one of the last independently owned major metropolitan newspapers in the country, is making a bold move.
"No one has come right out and said I'm crazy," said Mark Lever, the newspaper president and CEO. "I'm sure they think it."
But the 43-year-old businessman, who works from the paper's glass offices in suburban Halifax, doesn't care. He believes he has found the key to newspaper success in the 21st century – "hyper-local" coverage and entrepreneurial thinking.
In the past few weeks, the Chronicle Herald launched a separate Cape Breton edition, featuring a front page tailored to the island, and more local content. It has hired two reporters (from the competition, the Cape Breton Post), a photographer and several sales and marketing people. Its shingle is hanging out on the main street of Sydney, part of the Cape Breton Regional Municipality (CBRM), which is the province's second largest municipality after Halifax.
Meanwhile, on May 1, the company will launch the Cape Breton Star, a free weekly community newspaper that will be delivered along with the Herald and available at 115 locations around the island. The company hopes to distribute 18,000 copies.
Mr. Lever has also hired three sales and marketing reps in Toronto; in the same month that he opens his new Sydney office, he boasts, he will also be opening one in Toronto.
The Cape Breton Star will be the 37th product from the Herald, which includes the Casket, a weekly newspaper in Antigonish, recently purchased by the Herald, and free weekly community papers in Bridgewater – the South Shore Breaker – and in the Annapolis Valley – the Valley Community Herald.
Mr. Lever is subject to scrutiny as he is married to Sarah Dennis, the owner of the newspaper, whose family has run the Herald for more than 100 years. He is an outsider to the business, taking on his new role nearly three years ago. "My belief is if you're not growing you're dying," he said. "And I'm tired of hearing about newspapers dying. As much as I love our history … this is about where we're going. A lot of the industry is frankly about what we used to be, crying over the millions of dollars in classified ads [lost]."
In the past three years, the Herald has grown from 307 to 382 employees, including 93 reporters, editors and photographers in the newsroom. "We are a private company … [but] I can tell you that we are on much more solid footing today than we were three years ago. We probably couldn't have afforded this investment three years ago," Mr. Lever said.
Kelly Toughill, a journalism professor at the University of King's College in Halifax, believes more is involved in Mr. Lever's expansionist moves – it's a full-blown, old-fashioned newspaper war. "I think this is part of a general expansion," she said, pointing to the free weeklies on the south shore and in the Valley. "They seem to be taking on TC [TC Transcontinental] and the community papers' ad revenue in a very targeted way."
Transcontinental owns the Cape Breton Post and two other daily newspapers in Nova Scotia, as well as a number of weeklies.
Mr. Lever senses opportunity. The Herald's average daily circulation, according to Newspapers Canada, which tracks circulation and ad linage, is 109,210 – and 6,500 of that is in Cape Breton. Mr. Lever is hoping to increase that by 3,000. Before the Cape Breton edition launch, the paper published a "metro" edition for Halifax and "provincial edition" for the rest of the province.
The move means competing with the well-entrenched Cape Breton Post, which had 20,675 average daily circulation in 2012. Attracting subscribers away from the Post is part of the Herald strategy. Part of the marketing campaign for new subscribers includes $2 off milk at the corner store, free coffee at Irving gas stations and an extra $10 in Canadian Tire money with a "fuel up."
So far, TC Media is not doing anything special to respond. "We haven't unleashed any great new effort as a result of this," said Kevin McIntosh, content director for the TC Atlantic and Saskatchewan newspapers. "It's a wide-open market out there, people are free to go where they feel they need to go. … we think very strongly that we are the number one source of news and information about the communities where we work."
The economics and demographics for Cape Breton, especially in the CBRM, which has a population of 97,398, are not good. The population is declining and poverty rates are higher there than in the rest of the province.
Add to that the fact newspaper advertising is drying up. "At one point it looked like community newspapers had a big advantage because local barber shops, auto repair places … had nowhere else to advertise," said Chris Waddell of Carleton University's School of Journalism. "But Google and Facebook are getting better and better at micro-targeting advertising so that they can deliver ads on websites to IP addresses and figure out where the IP addresses are."
Mr. Lever, who grew up in Cape Breton, sees something positive in the economy. He notes the amount of consumer spending in the region – money earned in the Alberta oil sands by Cape Bretoners who come home and spend it on new cars and new homes. "You don't have to look much farther than driving through Sydney," he said, "and look at the car lots with lots of inventory."