La Presse+: It doesn’t make sense

La Presse+

La Presse+, the iPad app that’s supposed to revolutionize the newspaper industry, launched this morning after a glitzy party last night.

You can read news stories about the new app from Canadian Press, the Globe and Mail and J-Source, or just go to the website and read the press release (also in English), or see the note to readers from André Desmarais or the introduction from publisher Guy Crevier.

I don’t have an iPad, so I can’t really review it (see links to early reviews below). Based on what I’ve seen and heard from others, it seems to be very well designed with plenty of cool features. It might be the best newspaper iPad app ever created. (A version for Android tablets is expected by December.)

For the sake of argument, let’s assume that’s true. Then what?

La Presse is giving this app away for free, arguing that there’s an “irreversible” expectation that content online should be free. This despite the fact that most other large newspapers in Canada have either adopted a paywall or are in the process. And despite the fact that many apps on the iPad actually do manage to get money out of their users.

The paper doesn’t stop there. Seeing this as a transition, from the printed medium to an electronic one, it is essentially encouraging its readers to cancel their print subscriptions and move to this new platform. If enough people do so, they could shut down the print newspaper completely.

In a world where print advertising and print subscription fees remain the largest sources of revenue for newspapers, where the increase in online ad revenue is met by a decrease in print ad revenue that’s an order of magnitude higher, all of this seems absolutely insane.

It’s not that I don’t think newspapers should be investing during this transitional time. Nor is it that I don’t want La Presse to succeed (though professional jealousy might be a small part of it). I just don’t see how the numbers work. They spent $40 million and almost three years producing this app. They’ve hired 100 extra people, who will work alongside the 200 journalists already on the print side. And they expect that all of this extra spending, plus the loss of subscription fees from people who abandon the print edition, will be made up for by iPad advertising alone.

The numbers just don’t make sense to me. Nor, according to the articles above, do they make much sense to analysts and competitors.

We’ve had a situation like this before. The Daily, an iPad newspaper launched by News Corporation, failed after two years because it didn’t get a large enough audience. To his credit, La Presse’s Guy Crevier has an answer to that, telling the Globe that The Daily didn’t have big scoops and its content wasn’t worth paying for.

But The Daily also had a much larger potential audience, while La Presse is limited to the French-speaking Quebec market.

That’s not to say that making this work would be impossible. It just sounds very difficult.

And the thing is, we won’t know whether it is successful, unless they tell us. La Presse is owned by Gesca, which is owned by Square Victoria Communications Group, which is owned by Power Corporation. Power, the only one of these that reports its finances publicly, doesn’t break that information down much, and so we know very little about La Presse’s balance sheet. Many critics of Power Corporation suspect that La Presse in particular is a big money-loser that is kept afloat as a vanity project of the Desmarais family. I don’t know if that’s true (nor am I necessarily against very rich people owning money-losing newspapers for reasons of ego, provided they’re at arm’s length), but the fact is we don’t know whether La Presse pays for itself, and we won’t know if this app will help or hurt its finances in the short, medium or long term unless something changes.

One thing we do know, and that everyone can agree on, is that La Presse is taking a big bet on this project. If it succeeds, it could very well revolutionize the newspaper industry. And if it fails…

Reviews

  • Patrick Pierra, the former publisher of Branchez-Vous, reviews the app for the Tab Times, calling it “gorgeous”. But he also lays out the first criticisms: It’s landscape-only, the download is 100MB (at least for the first day), and the navigation options could be confusing
  • Michelle Blanc, the local social media/marketing expert, says she was skeptical, but quickly became convinced after trying it that the app with revolutionize the industry
  • Maxime Johnson, tech columnist, provides a detailed analysis and offers a more optimistic, though still realistic, take on its future
  • Radio-Canada talks to experts, including one specializing in digital advertising who points out that the La Presse+ rate card is a lot more expensive than other digital ads, that it charges extra to add interactivity (which means some ads won’t be interactive at all), and that it uses non-standard formats, which means advertisers will have to design ads specifically for this platform instead of designing a few standard web ad formats and using them on multiple sites.
  • Adviso does usability testing on the app by bringing an iPad to a café and asking random people to try it. The results are interesting. For one thing, many people don’t know how to read the articles. They tap and double-tap, unaware that they’re supposed to expand the text with two fingers. It’s a minor issue that people will get over, but the next version should also go to the text of an article on a double tap.
  • The Talking New Media blog calls it the best newspaper app it’s seen, and credit it particularly for the fact that it’s not just replicating the website or the paper in tablet form.
  • Garcia Media on how the app isn’t “newsy” enough
  • Open source advocate Fabian Rodriguez complains that La Presse didn’t just create an API and let people develop their own apps (which, of course, would mean people could circumvent the ads)
  • La Presse columnist Patrick Lagacé explains how this new platform will change the way journalists think about storytelling

28 thoughts on “La Presse+: It doesn’t make sense

  1. OlivierL

    150 millions Ipad has been sold this year only, and since I own one, I dont read newspaper at home anymore, just when I grap one at subway or something.

    It might look a bit early, but since newspaper futur is obviously heading threw Ipad device. First to be there will be the first to gain his notoriety and they’ll be miles ahead when the other newspaper will be choking to death.

    On the other hand, I dont understand how it has come to cost 40 millions… and still not adapt to Android. (wich is gonna cost many more millions!)

    Reply
  2. Charles

    Credibility + Exclusives + Eyeballs (they talk about 400 000) + Interactive Ads = success.
    Their app is truly amazing. A game-changer for readers AND advertisers.
    And 40M$ ain’t that much if you compare it to the 1,7G$ deal between the Globe and Mail and Transcontinental…

    Reply
    1. Fagstein Post author

      40M$ ain’t that much if you compare it to the 1,7G$ deal between the Globe and Mail and Transcontinental…

      But the Globe/Transcon contract includes 18 years of printing. Print is obviously expensive, especially for a national newspaper.

      Reply
  3. Tommy

    From the CP story :

    “The company spends about $90 million annually on printing the paper. Crevier wouldn’t say if the printed edition’s days are numbered.”

    There you have your answer to where the money comes from. No, it’s not from iPad advertising alone. Money you don’t spend is just as good as money you receive.

    Reply
    1. Fagstein Post author

      But La Presse isn’t shutting down its print edition. And the print costs are covered mainly by the $220 a year subscription fee (about $48 million total, assuming all subscribers pay full price) and print advertising.

      Reply
      1. Hugo

        Like Tommy says: if their printing costs > their revenues from print, it’s maybe a good strategy for them.

        Reply
  4. ATSC

    Perhaps this is just a in-between step.

    Free for now, because people have to invest in a e-reader or tablet.
    Get their readers to adapt to the e-newspaper. Kill the print edition.
    And then offer a $10-$15 a month full access e-newspaper edition.
    No more print edition costs.

    At one point, nothing is free in this world.
    One should expect the e-newspaper edition of LaPresse will cost something.

    Also, right now, LaPresse is a Montreal newspaper. Purchasing the print edition outside of the Montreal area costs more. Perhaps LaPresse is also looking at accessing all the potential francophone readers in the rest of the province.

    Montreal offers francophone readers three daily french language newspapers. Plus the two freebees that are given away at the metro stations. Readers in the rest of the province may not have these types of choices. The problem with this though is a Montreal-centric point of view that people in the other parts of the province may refuse to accept. After all, most french TV is Montreal-centric. As most English TV is Toronto-centric. All that is really left for real local points of view are local newspapers, and radio.

    Reply
    1. Fagstein Post author

      Perhaps this is just a in-between step.

      Guy Crevier said the app will be free “forever”. I suppose they could fire him and change their mind, but the impression is clear that they’re promising never to charge for it.

      Reply
  5. Danny

    It makes lots of sense. Gesca is betting their papers will still be relevant after print finally dies. Something Postmedia shouldn’t be willing to bet.

    Reply
  6. Wally Wallace

    For what is Montreal’s best newspaper, the LaPresse home delivery service is really bad and far below the standard set by the gazette, for instance you cannot cancel the saturday LaPresse paper on thursday night, but the automated system will then automatically cancel your monday paper instead – yes incredible but sadly true. (insert joke about how french bureaucratic top-down mindset doesn’t understand the very concept of customer service) so digital removes that weakness from their distribution system. This also opens up the reader experience to anyone anywhere, optimized for the tablet future of our reality. But no android? And be sure of one thing: your user-tracking profile will be sold to advertisers who love to know everything about you… Because it is all about delivering eyeballs to advertisers, and nothing else has greater importance.

    Reply
  7. Alex

    La Presse is not kept around because of vanity but rather because it’s the main propaganda tool of the Desmarais empire. They don’t care if it makes or loose money as long as they can frame debates and manipulate information to the advantage of the Desmarais family. Please don’t pretend you don’t know this mr. Faguy.

    Reply
    1. Fagstein Post author

      They don’t care if it makes or loose money as long as they can frame debates and manipulate information to the advantage of the Desmarais family.

      Do you have evidence that the Desmarais family is “manipulating information” at La Presse?

      Reply
      1. Alex

        For example when Desmarais’ oil company Total started to invest in Alberta’s tar sands in 2009, pro tar sands editorials suddenly started to appear in La Presse. Coincidence?

        Reply
        1. Fagstein Post author

          For example when Desmarais’ oil company Total started to invest in Alberta’s tar sands in 2009, pro tar sands editorials suddenly started to appear in La Presse. Coincidence?

          Right, because La Presse has not published anything that has been critical of Canada’s oil sands since 2009.

          There have been pro-oil-sands stories and editorials, and chief editorialist André Pratte in particular has been a defender of oil sands (plus his response to criticisms of conflict of interest is hardly convincing), but I don’t see how anyone could argue that its coverage of the issue has been one-sided. Even its editorial board isn’t united on the issue. François Cardinal in particular has been very critical of Canadian oil companies.

          Reply
          1. Alex

            Those articles were published after La Presse was called on their pro tar sands propaganda by le Journal de Montreal. It was a lot easier to publish these articles and save face than publish articles on their oil company Total and the various criminal activities it commited in Libya. That’s something they were also called on by the competition but never really replied to.

            And why does Desmarais have to continually hide behind Andre Pratte? Can’t he show a little backbone like Warren Buffet in the States and actually speak for himself instead of always having toadies parotting his opinions? For all his money and power he acts like a coward who hides behind his newspapers (70 % of all writen press in Quebec) to push his agenda. He reminds me of Pete Peterson of Wall Street who hides behind a bunch of phony organizations to push his agenda of getting rid of Social Security, another rich and powerful coward.

            Reply
            1. Fagstein Post author

              For all his money and power he acts like a coward who hides behind his newspapers (70 % of all writen press in Quebec) to push his agenda.

              Gesca doesn’t own 70% of print media in Quebec, either by readership, number of copies printed or number of titles. Not even close.

              Reply
      2. Marc

        You don’t need evidence to support something that is common knowledge. If I were to say that the CN Tower is the tallest structure in Ontario, would ask for evidence? And in the case of La Praîsse, it’s more complex than that. The paper is the media mouthpiece for the PLQ, whose master puppeteer is Daniel Johnson. Isn’t it funny that he is a personal friend of Desmarais and also the chair of Power Corp, owner of La Praîsse.

        One needs only to look at the names of the people involved and follow the money.

        Reply
        1. Fagstein Post author

          You don’t need evidence to support something that is common knowledge.

          Of course you do. There are a whole lot of things that are “common knowledge” but nonetheless false.

          If I were to say that the CN Tower is the tallest structure in Ontario, would ask for evidence?

          I would check that information before publishing it anywhere. Is it taller than the CHCH transmitter tower? As it turns out, it is. But I had to look it up.

          The paper is the media mouthpiece for the PLQ, whose master puppeteer is Daniel Johnson. Isn’t it funny that he is a personal friend of Desmarais and also the chair of Power Corp, owner of La Praîsse.

          I would think just about every rich person in Quebec not named Péladeau is a personal friend of the Desmarais family. In any case, I don’t get how Daniel Johnson is running the PLQ (as opposed to, say, Jean Charest or Philippe Couillard).

          Reply
  8. Quebecois Separatiste

    La Presse is a federalist paper. Even though some of of the staff (I remember Chapleau saying he support a independent Quebec) are not, the main editorial line is and will always be federalist. Think Andre Pratte. They might not intervene directly on a day to day basis but you are never going to see the editorial chief of La Presse be a separatiste.

    La Presse is the mainstream francophone Quebec paper and it is wildly read by separatist and soft nationalist. I even read it often.

    The Desmarais are strongly federalist and have billion invested around Canada.

    I think they view La Presse as a investissement toward promoting their own agenda.
    I wouldn’t be surprised if other people contribute with $$$$ to La Presse that via backroom deal.

    Reply
    1. Fagstein Post author

      They might not intervene directly on a day to day basis but you are never going to see the editorial chief of La Presse be a separatiste.

      That’s probably true. You could make the same argument that you’ll never see Le Devoir endorse the Liberals, or the Toronto Star endorse the Conservatives. Or Sun Media endorse the NDP. Newspapers have their political slant, and people tend to work for the institutions that match their personal biases.

      I think they view La Presse as a investissement toward promoting their own agenda.

      The bizarre economics of this project would seem to support that thinking.

      I wouldn’t be surprised if other people contribute with $$$$ to La Presse that via backroom deal.

      I can’t imagine any backroom deals that would be more than a drop in the bucket compared to a $40 million investment. And where would it come from, anyway? Politicians? Like-minded business executives? Ottawa?

      Reply
  9. Guy

    Supply me with an iSomething and I will read your newspaper. Other wise I’ll keep reading my usual free stuff on my Android slate!

    La Presse set aside 60 % of possible reader after spending 40 Millions. More……my paid subscription for the printed version paid for an application that I don’t have access because I didn’t join the iSect !

    Reply
    1. Fagstein Post author

      my paid subscription for the printed version paid for an application

      Well, no. Your paid subscription pays for printing and delivery. That’s why La Presse+ is free. Without printing and distribution, its costs go way down.

      Reply
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  12. K.Trudel

    It’s a big gamble that hinges on whether the Presser’s heavy hitting writers can attract a larger audience than that of the print version. What might be expected is that there is a big first mover’s advantage. But is this advantage enough to compensate the limitation of La Presse’s specifically Montrealer social and political content. They cannot pretend to appeal to the whole province with the content La Presse has had in the past. Much less other people of other countries. If it is to succeed as a financial endeavor, it will have to syndicate content aggressively, which so far is would seem odd considering La Presse’s internal culture.

    Reply

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