Torstar reinvents the core of its business
Launches single sign-on program for community websites
Torstar Corp. is reinventing the core of its business based on “a deep, customer-centric obsession, journalism excellence, advanced data — and the right culture,” according to the company’s president and CEO.
“You’ve got to invest in all new departments and talent,” John Boynton told analysts on an earnings conference call Wednesday. “There needs to be investment in systems and infrastructure.”
Torstar is planning to introduce a digital subscription program for thestar.com, although Boynton said there was no timetable for when that might happen.
He added in remarks at the company’s annual general meeting, also held Wednesday, that the future for newspapers and many other organizations is in a “healthy mix” of ads and recurring subscriptions.
“Music companies, entertainment companies, financial services companies, wireless companies and credit card companies are now heavily into digital-subscription business models,” Boynton said.
“In most cases, people said it couldn’t be done, and in some cases it turned around entire industries.”
While ventures including Costco and Amazon Prime are operating subscription services that rely heavily on data, media companies are building digital subscription models as consumers show an increasing willingness to pay for news.
“More of that content over time will be monetized, and less and less will be available for free or for other companies to use without permission or payment. This is a global trend,” Boynton said.
“Clearly, consumers are seeing that content from trusted sources has value again.”
Torstar is launching a sign-on program for 30 community websites that will give its customers easy access to all content, as well as special features, such as commenting, along with flyers and coupons.
The single sign-on program will “help us responsibly and transparently collect data to understand and help deliver better value and content and experiences for our registered customers,” said Boynton at the annual general meeting, held in Toronto.
The sign-on rolls out Thursday to the flyer site save.ca and to community websites that include durhamregion.com and mississauga.com, and will eventually include all of the Torstar brands and services including thestar.com.
Boynton said the program is among several steps the company is pursuing to transform as print advertising revenue remains under pressure. Torstar businesses include the Toronto Star, The Hamilton Spectator, Waterloo Region Record, Peterborough Examiner, Niagara Falls Review, St. Catharines Standard and Welland Tribune, as well as more than 80 weekly community newspapers in Ontario. Torstar holds a majority interest in VerticalScope, a vertically focused North American digital media company.
In its outlook for 2018, Torstar said it’s preparing to invest between $11 million and $13 million of operating expenses this year in its transformation efforts, with $1.4 million recorded in the first quarter.
Torstar, meanwhile, posted a loss of $14.5 million in the first quarter ended March 31, 2018, down from a $24.3 million loss in the same period a year ago.
Segmented adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $1.8 million, down just $200,000 from the same quarter last year as cost savings almost offset revenue declines.
Torstar’s 56 per cent stake in online community publisher VerticalScope added $5.4 million to adjusted EBITDA, something Boynton expects to continue.
“Looking forward, we expected continued growth at VerticalScope and continued efforts on costs which we anticipate will help to offset pressures on print advertising revenues in the newspaper operations and new costs associated with our transformation. Transformation of our core brands remains our top priority and I am encouraged by the progress we are making,” Boynton said.