Why a Canadian newspaper invested a 'meagre' $40m in free app

Four years ago, in preparation for the launch of Apple's iPad, Canada's La Presse newspaper started a $40 million investment in building an app – which is free to access to all readers.

Speaking at the Tablet and App Summit taking place in Berlin, Guy Crevier, president of La Presse, described the multimillion dollar development as "meagre" when compared to how much would be required to develop and distribute a print product.

Out of the total $40 million investment, the news outlet has spent $24 million on salaries, $6 million in assets, $8 million on software, and $2 million in research.

Crevier said this was a "meagre" investment when compared with developing and distributing a new print product, which he estimates would have cost $174 million.

Crevier expects the $40 million investment to be recouped in 18 to 24 months from now.

The company

La Presse's print edition has a circulation of 225,000 during the week, and a staff of 300 journalists. Via the digital offerings, the news organisation reaches 1.8 million unique visitors each week.

Against the wall

La Presse invested in an app as it "wanted to change the business model" of the newspaper, Crevier said. "When numbers are dwindling you need to come up with a new model."

The team from La Presse worked closely with Apple from the start, keen to learn the technology giant's "vision" for the iPad, which launched in 2010.

There were four reasons for investing in a new medium and keeping it free to access, said Crevier: a decline in circulation, a drop in advertising, a prediction that tablets would reach a mass market, and because younger readers expect free digital content.

'News available free of charge is an irreversible phenomenon'

The app that was developed, called La Presse+, responds to Crevier's belief that "news available free of charge is an irreversible phenomenon".

He explained how research found that few 16 to 34 year olds read daily newspapers – but they use mobiles and tablets.

"The challenge for publishers is to reach the younger generation," Crevier said. "And young people don't want to pay for information."

"I am against paywalls," he explained. "You can't reach 18 to 34's with paywalls," he said. Instead, you reach the "55+ generation", which he argued is not a long-term strategy for reaching the readers of the future.

He added: "Most digital strategies are not digital strategies – they are sales strategies."

The app

La Presse+ is easy to navigate, Crevier said, with lots of images. People like to swipe horizontally, he said, and the app offers "a new way of storytelling", which he demonstrated in the way readers can click on images, maps and timelines.

Apps from most newspaper companies are "only a mirror image of the papers" and offer nothing new, he said.

Advertising

The app carries advertising, much of it interactive, with the company charging $16,000 for a page. And advertisers are prepared to pay as "we can prove ads are successful", Crevier said.

'A spectacular start'

And the results? La Presse+ has had 300,000 downloads and adds 800 new readers a day. Readers spend an average of 35 minutes on a weekday reading the app and 70 minutes at weekends.

"In Montreal on a Monday morning there are about 1,000 people that walk into an Apple store and buy a tablet in order to subscribe to Press+ free of charge," Crevier told the conference, although he did not explain how this figure was recorded.

And the publisher has succeeded in its aim of reaching a younger market. Crevier reported that out of the audience in Quebec, 35 per cent are aged between 18 to 34.

La Presse+ has had "a spectacular start", he said.

This presentation was in French with translation to English.

Journalism.co.uk is at the World Publishing Expo in Berlin. Follow @SarahMarshall3 / @johncthompson / #wpe13 for updates. The 'live notes' of today's sessions are at this link.

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