A smart artcle on a publisher moving to full digital
January 11, 2016
by Frederic Filloux
The 132-year-old Canadian newspaper has dumped its weekday paper. From now on, its only vectors will be its iPad app and the Saturday paper. This move is the culmination of a process started five years ago.
In 2010, Management at the Montreal daily La Presse came to a conclusion: the traditional paper was doomed. The publishing group, created in 1884, enjoys a stable and patient shareholder, the Groupe Gesca, a subsidiary of the industrial conglomerate Power Corporation of Canada. They durably supported La Presse’s management, a team characterized by a mixture of vision, strong leadership and quiet resolve.
Since January 1st, La Presse only relies on its tablet edition, “La Presse+”, and on its thick Saturday paper, typical of the North American market with its 10 sections enjoyed around households every weekend.
The move didn't come as a surprise. On September 16th last year, La Presse CEO Guy Crevier broke the news (his statement in French here):
“...Over the last decade, all indicators pointed toward a dead end for the industry. It will impact negatively the quality of content provided by publishers who won't have deployed a comprehensive strategy [to deal with this erosion]. In North America, the newspaper industry has lost 63% of its advertising revenue between 2006 and 2013, with a 22% decline in circulation over the same period...”
For La Presse, the epiphany came with the 2010 launch of the iPad. “We immediately saw it as an industry game changer”, said Yann Pineau who holds the title of “Continuing Improvement Manager”. Then, all battleship turrets rotated in the same direction: a complete transition to digital for one of Canada’s oldest media properties.
From outset, every single part of La Presse's management or departments was convinced that going fully digital was the only viable goal. That will prove a crucial success factor. On both sides of the Atlantic, very few media organizations enjoy such alignment; too often, the transition to digital resulted in an endless struggle between partisans of the old ways and promoters of the new order — a conflict that still continues in places. Regardless of public claims, in many media companies, newsroom and management still consider the newspaper as the “noble” version of the trade. At La Presse, the goal was set once and for all, endorsed by the entire management, with the blessing of shareholders who consented to a sizable investment in the transition. At some point, about 100 people were involved in the project, which cost CAD$ 36m (US$25m.)
The transition was meticulously planned and executed. The obsession was to not disturb the daily routine that La Presse readers had enjoyed for a long time. This explains the very nature of the app. For instance, instead of going for a constantly updated stream of news, as many digital newspapers do, La Presse went for an “encapsulated” edition, made available every morning, to be read all day long. Its only concession to breaking news is a web-view that connects the app to the www.lapresse.ca site for updates.
It didn't come by accident. It actually took almost three years of thorough market research and testing to come up with the right formula. “We had two objectives: the migration to the digital platform, and rejuvenating our readership”, said Pierre Arthur head of marketing research. “As soon as 2011, we began testing with mockups to show the concept to our readers. We did all sorts of tests, including eye-movement monitoring. We tested every section of the newspaper contents, every type of story on various models, from mockups to working prototypes.... The editorial team was closely involved in the process. They constantly tweaked and improved stories to fit emerging reading patterns and to meet our goal of providing the most complete and engaging experience possible. We spent hours looking at how people navigated the app, looking at body language that betrayed pleasure or discomfort, we asked them to retrieve a story, we stress-tested the whole interface... During 18 months, we went through about 15 different ”
During the entire process, the marketing team was concerned with preserving, to the extent possible, the newspaper experience and ritual of leafing through a publication without losing orientation or cognitive markers.
Building a new advertising offering
A great deal of attention was given to the advertising experience. Very quickly, La Presse management realized there were no other way than going for the free model. Too much content was available everywhere on the web and mobile to take any risk. “We knew that if we went for a paid model, it would be a serious barrier to entry”, said Pierre Arthur. “We didn't want to go for any kind of paywall system that only works if you have a captive readership.”
Then, building a good (and valuable) advertising experience was crucial.
To assess reader tolerance to ads, tests were conducted with combinations of promotional formats. La Presse had one goal at the forefront of their mind: avoiding the economic absurdity of the web and its unlimited supply of advertising space. They went for the opposed direction, which is to recreate some form of scarcity, as in television. The numbers of pages of a daily edition —the “screens” in La Presse+ parlance— varies in accordance to the advertising load: The app holds about 60 screens on weekdays, twice that for the Saturday editions and its ten sections.
To avoid reader rejection, La Presse+ came up with strict rules for its advertisers: no aggressive formats, no pop-ups, no pre-roll for video capsules, no video starting automatically at full volume (the best incentive ever to install an ad blocker). “We actually assist advertisers, if they need it, by providing them with specific tools”, explains Yann Pineau, who underlines the advantages of the process: The apps embarks an XML code and a user experience that has been vetted by the publisher... In addition, the tolerance to ads is carefully monitored.
In passing, La Presse sales house has built bespoke native ad products that allowed it to convert and expand its existing lucrative business of inserts tucked into the weekend edition.
All of the above stands exactly at the polar opposite of the excesses of most news sites and mobile apps set up by news organizations that badly hurt their business models with insufferable ads that paved the way for a vibrant ad blocking sector.
The final element in this near impeccable execution was preparing the readership —especially the oldest segment, which, as designed from the outset, will eventually be deprived of its beloved hand-delivered newspaper. La Presse never made a mystery of its intention to ditch the physical paper at some point. Subscribers were duly prepared and several alternatives were offered and explained in a massive ad campaign. Then, the September announcement and its realization on January 1st didn't surprise anyone. As for the newsroom, everybody had switched to the tablet version long ago —inlcuding the editor-in-chief who announced he was ditching the print version when La Presse+ was launched. (Today the newsroom has realtime metrics to see what works or not in every edition, even before the morning editorial meeting.)
As a privately held company, La Presse doesn't release financial data. But the figures given for its digital conversion are compelling.
La Presse+ claims a readership on 454,000 on weekdays. That compares to a circulation of the late print edition of about 100,000 (it was twice as high before the launch of the tablet edition.) All reader segments are doing fine: Yann Pineau notes that the “Pause” section of La Presse+ has more readers (100,000) that the largest woman magazine in Canada.
CPMs are said to be higher than for print: from CAD$ 42 for a half-printed page to CAD$ 68 on digital, according to figures that appeared in a piece by Ken Doctor and confirmed by my interlocutors. By contrast, the traditional web carries CAD$ 13-14 CPMs, and mobile yields CAD$ 2-3.
In terms of reader engagement, the digital version works as well as, if not better than print: on average, readers spend 40 minutes on La Presse+ during the week, 73 minutes on Saturday, and 50 minutes on Sunday.
As for the readers’ age, it went down significantly: 65% of the digital edition readers are in the 25-54 bracket.
While successful, the model implemented by the Montreal-based publisher is facing challenges. As it is today, La Presse+ is not a real mobile edition. It is read at home, including in the evening. But like any news publishers, La Presse faces a sustained migration of its youngest readership toward mobile, i.e. smartphones, that monetize twenty or thirty times less than a tablet.
The model implemented by the French-Canadian media company is not replicable everywhere. Among other factors, about 50% of La Presse's advertising revenue came from the Saturday edition. That alone was a major incentive to get rid of the weekday editions. The price charged for the print paper, less than one Canadian dollar on weekdays, was low. As a result, it made more sense to opt for an all-free strategy than trying to go after paid-for subscribers that would have paid only few bucks per month. By contrast, in France as an example, a newspaper such as Le Monde now costs €2.20 per copy (US$2.40, CAD$ 3.12). There, raising the newsstand price is seen as the only way to offset double digit drops in circulation, pourvu que ça dure...
The way La Presse killed the paper product shows similarities with the approach implemented by the Nordic media group Schibsted. In the early 2000's it elected to accelerate the demise of paper classifieds and to built a global empire of digital classifieds (mostly free.)
There is no doubt, however, than many newspapers across the world will follow La Presse's path. It might even help save a few. Already, a big player such as The New York Times is gently pushing its readers away from print by raising the price of the paper edition while beefing up the digital offering in the hope of doubling its digital revenue to $800m by 2020. If news has a future, the weekday paper is on deathwatch.