La Presse is making a $40-million bet on the future of news, hoping that readers and advertisers will embrace a new tablet edition that could one day replace its printed newspaper.
The Montreal-based daily unveils its new digital edition today, the result of 2 1/2 years of research and development that has seen the 129-year-old newspaper add more than 100 journalists to its newsroom at a time when others across North America are shedding staff.
It is giving the product away free, despite spending tens of millions of dollars to put it together, even as its competitors, including The Globe and Mail, increasingly turn to paid online subscription models to fund their journalism.
The experiment will be closely watched by publishers across North America, many of whom are also experimenting to some degree with digital editions. La Presse is considered the paper of record in Quebec and holds a place of prestige among the province's dailies, and it is controlled by the influential Desmarais family, considered among the savviest investors in the country.
"Paywalls may be fine for some, but have you ever seen any number that shows you these newspapers are able to attract young people? No, you never do," says Guy Crevier, president and publisher of La Presse. "And that's why we need to completely reinvent the business model."
The troubles facing the newspaper industry are well documented. As readers have migrated online, digital revenues are increasing at most papers, but they aren't coming in fast enough to offset declines in print.
La Presse hopes to change the math by introducing a new product that could some day replace the print edition – the tablet edition is to be supported entirely by advertising revenue. It chose to focus on the tablet market because it offers a better combination of size, portability and function than smartphones or websites could provide.
The paper's executives believe that advertisers will pay similar rates to what they are used to paying in newspapers and magazines to be associated with the paper's award-winning content, a gutsy gamble at a time when advertisers are directing their budgets toward social media that often come with much lower ad rates.
The early indications from advertisers are encouraging, said ZenithOptimedia Canada chief executive officer Sunni Boot, but the market needs time to figure out how to take advantage of its interactivity.
"Consumers are well ahead of the industry in terms of how we are serving them ads in the printed medium," said Ms. Boot, whose company buys advertising space in media on behalf of its clients. "There is a great receptivity to something like this … it gives advertisers a chance to catch up to where consumers are already at and experiment a little bit to find out what gets traction."
The digital product is not a replica of the daily newspaper, and its newsroom runs parallel to the existing 200-journalist-strong print newsroom. The tablet edition will be released every morning through the Apple newsstand with a set number of stories, much like a daily paper, but its articles are laced with videos and audio clips, and most stories come with slick fact boxes that pull out key facts from each story for quick reading (users can also click a tab to see breaking news).
Its ads are interactive – one designed for a toothpaste company allows readers to make teeth whiter by sliding a button, another mockup for a decorating company allows readers to change the colours on the walls.
Some Canadian magazines, particularly those owned by Rogers Media, have also moved toward enhancing content on their tablet editions. But La Presse is the first newspaper to make such a large bet on the tablet, and can potentially deliver larger audiences than magazines such as Maclean's or Canadian Business, which is why the company is convinced it should give its product away.
"We have 1.7 million readers every week and 900,000 of them never touch a newspaper," says Mr. Crevier, who is also president of the Power Corp.-owned newspaper group Gesca Ltd. "When we speak to them, we learn they want to read news but they don't want a paper. They don't know why they should pay for something that is free everywhere. That is irreversible."
Critics and competitors aren't sure what to make of the company's decision to offer the tablet edition free. They point to the demise of Rupert Murdoch's The Daily, a tablet-only newspaper backed by News Corp. that was shut down a little more than a year after it was launched, as Mr. Murdoch lamented that "we could not find a large enough audience quickly enough to convince us the business model was sustainable in the long term."
"I guess they want to be different," said Paul Godfrey, chief executive officer of Postmedia Network Inc., who has been an outspoken advocate of paywalls for the company's 10 daily newspapers. "I don't see how they are going to get very much money out of it – they're swimming against the tide."
Mr. Crevier has heard the criticism, but he's not willing to concede that a rich ad market is a thing of the past. He believes the strength of his company's news will convince readers to read and advertisers to pay top dollar for limited space on its tablet edition.
"The Daily didn't work," he says. "But nobody liked it. What story did it ever break? Did you ever hear about it having a scoop? On the day they shut down, they did a front-page story about the richest dog in the United States."
READ ALL ABOUT IT
What it is
An iPad-formatted newspaper, delivered free each morning through the Apple newsstand. It's been in development for 21/2 years, and cost $40-million to build and test.
Why it's different
It doesn't simply replicate the printed paper as a PDF. It is produced separately and draws on the newspaper's 300-person newsroom for text, video and other features not accessible in print.
What it offers readers
The stories that make the tablet edition are produced specifically for the medium – which means features such as videos aren't afterthoughts to a print story. While the stories are selected the night before and remain static through the day, there is also a link to the paper's mobile site for breaking news.
What it offers advertisers
La Presse has developed 26 ad templates, that can run in the app, making it easy for advertisers to drop their content into the tablet edition. So a car maker may choose the template that allows readers to spin its car 360 degrees just by touching the screen, for example. It also produces data that can tell advertisers how users are interacting.