Tough decisions ahead
Postmedia focuses on ‘areas where we can win’
Postmedia Network Canada Corp. must make tough decisions in markets where revenue from digital services isn’t growing fast enough to offset declines in print revenue, executive chairman Paul Godfrey said Wednesday.
His comment came after the Toronto-based company, which owns the National Post and other daily newspapers as well as other print and digital publications, reported a $15.5 million net loss in its third quarter ended May 31.
Postmedia’s overall revenue fell to $171 million, down 10% from a year earlier, reflecting a years-long, industry-wide shift in readership and advertising to digital forms of content through social media and the internet.
Print advertising revenue accounted for most of the decline, dropping by $14.8 million or 16%, while print circulation revenue fell by $4.5 million or nearly 8%. Digital revenue rose about $2 million to $29.9 million.
Godfrey said in a statement ahead of a quarterly conference call that Postmedia must “take the necessary steps to focus on areas where we can win and make the tough, yet decisive, decisions about where we need to make changes.”
Cost-reduction initiatives that were implemented in the third quarter will result in $7 million in net annualized savings, Godfrey said on the call.
He noted that Postmedia also plans to cut its compensation expense structure by 10% by the end of the fourth quarter, which ends Aug. 31, through voluntary departures and layoffs.
The company said June 26 that it will stop printing daily newspapers in Portage La Prairie, Man., Kirkland Lake, Ont., and Pembroke, Ont., but will have a digital presence in the three communities. It also announced the closures of two community newspapers in Alberta and four community newspapers in Ontario.
Postmedia chief operating officer Andrew MacLeod said during the conference call that the company isn’t abandoning its print business because it “has an important role in building brands, and awareness, and in bringing people together.
“But the nature of what people come to us for has changed,” MacLeod said. “That necessi- tates our people adapting to the radical change we face in engaging the new strategies under way.”
He said in an interview after the call that part of Postmedia’s multi-prong digital strategy is to co-exist with Google and Facebook by going to advertisers as experts in combining advertising, Internet search and social media campaigns.
MacLeod added that Postmedia is looking for ways to “make more money” from the audiences it has created by providing more specific reader information so advertisers “can target the right audience, with the right message at the right time.”