Torstar’s transformation difficult, but needed: CEO
Digital media revenues add more to earnings as print advertising drops
Torstar Corp. is in the midst of a difficult transition towards a more digital future because the “status quo was not an attractive option,” its CEO told shareholders Wednesday.
“There is an imperative within companies to develop a capability to adapt and be decisive in this era of rapid change,” David Holland, president and chief executive of the Toronto Star’s parent company, said at its annual meeting. “We do not expect this transaction to be easy, but we do believe it will ultimately be proven to be worthwhile.”
In the past two years, the company — which also owns Metroland community newspapers and a suite of digital properties — has been making important decisions to ensure it can compete in an era of technological change, Holland said.
It sold its Harlequin book-publishing division to News Corp. for $455 million and used part of the proceeds to buy a majority stake in high-growth online media company VerticalScope, whose more than 600 online forums and niche content sites make attractive target markets for advertisers. “These developments mark a significant shift in Torstar’s asset base, a shift intended to orient the company as a whole to a more digital future,” he said.
It also invested in the digital-first storytelling platform Toronto Star Touch. The tablet app is free and attractive for advertisers because of the level of audience immersion and interactivity.
“While audience progress has been slower than we anticipated, the engagement of the audience that uses the app has met our expectations,” he said. The company also relaunched thestar.com website with a mobile-first orientation this week.
Meanwhile, Torstar has undertaken several cost-cutting measures related to its print operations. In January, it announced it would close its Vaughan printing press and outsource printing of the Toronto Star to Transcontinental.
The switchover, which will take place in July, is expected to save $10 million annually, though the savings won’t be fully realized until 2017. The plant is for sale.
Holland also took time during the shareholder meeting to thank outgoing Toronto Star publisher and Star Media Group president John Cruickshank.