Canadian Heritage Committee on May 17th, 2016

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thank you, Madam Chair.

First of all, I would like to tell you how proud I am of you and of Quebec. I think that you have really reinvented the model. The president of Éditions La Presse, Caroline Jamet, spent many years in the music industry, and her experience certainly helped open new doors. She witnessed the demise of dogmatic thinking. You were very courageous to change the model. I am moved because I believe that when people take control of their tools, they become resilient. You took control of a tool and that is very courageous on your part.

I can say that reading the news can go on forever. I could read the news the whole weekend. On Saturday mornings, the children complain because we spend a lot of time reading the paper and even looking at the ads because they have suddenly become interactive. That thinking is original and innovative, and that is very healthy for our society.

Now for my question. When you share your program with other newspapers, does this result in a business model, a model for exporting your Internet protocol abroad?

[Guy Crevier]

We transferred the program's intellectual property to a company called Nuglif, whose main role is to export our know-how. At present, we are negotiating with a very important American group and another player in a unique U.S. market, which nevertheless has a large share of the market. There is also a sizeable European group that has created its first edition and is testing it with its clients to see how it will be accepted in Europe. Not a week goes by without calls from foreign newspapers that want to talk to us about our experience. Nuglif not only looks after sales of the program, but it does all the strategic work: training people, implementation, marketing strategies and commercialization. It is not just a program that we sell, it is a global concept.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

As we are running out of time, I will ask my questions all at once and let you answer them one at a time.

With regard to advertising, is that also profitable? That should be the case, however, if it is not, what should we do to help you attract more clients?

Clearly, this model is advantageous. A community's advertising and the articles about it make up a newspaper. There is no reason why this chemistry would be negatively affected by advertising that is done elsewhere on the Internet.

Do you reach your sales targets with the current format and if you do not, why not?

In passing, I would like to thank Mr. Van Loan for being flexible and allowing this presentation to be given even though it is only in French.

I would also like to point out, with respect to your readers, the smooth transition that you mentioned. I think that you are pioneers, that you have set an example to be followed. I would like to tell you that my mother, who is 83 years old, bought herself an iPad. She went to Best Buy to get the training you provide. It's rather amusing. You have really managed to move your clients to the new platform. If, at 83, Canadians can make the transition, the future is promising.

Are your advertisers following you?

[Guy Crevier]

Many of them are and the reasons are quite simple. We show advertisers the readership figures. We tell them that people spend 40 minutes reading La Presse+ during the week, that we reach people between the ages of 25 and 54, that these are active participants in society, and that we have a winning formula.

We have been an active player for 15 years when it comes to the telephone and the computer. These two bring in no more than 10% of our revenue. The telephone, which is a very big consumption vector, accounts for barely $1 million in revenue a year. Why? Because we are competing against Google, Facebook and other Internet sites. Therefore, we decided—

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Your application La Presse+ results in colossal sales.

[Guy Crevier]

Sales are very significant. After distribution, printing and plant costs are deducted, we are in a better position today than we were in 2010.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Do you think that having one's own application is a smart way to deal with the competition? I have been saying that for a long time. However, it does require a lot of research and development.

[Guy Crevier]

That was certainly necessary at the time, since we were the first. Now, there are opportunities for those who want to acquire our technology or a similar technology. I'm confident that this is the only way forward.

Four years ago, most of the traffic to the La Presse websites from phones and computers essentially came from Google searches, either by our own subscribers or other readers. Now, traffic primarily comes from Facebook. These days, all information is consumed via applications.

If I could give you one piece of advice, I would tell you not to support a dying industry. Its death is inevitable. When you look at advertising figures, transfers to digital, and reading habits, it is clear that this industry cannot survive. Some will make it through. I think that will be the case for The New York Times, since it is more specialized and is well known. People can also include it in their office expenses. That said, the money required should not be injected in the system to support this industry but to transform it.

It is not necessary to invest over the long term. If you commit to what I would call long-term support, you'll create a welfare system, if I can call it that. In other words, you should invest in helping companies transform. Don't forget that in Canada, we have been masters at developing cultural and production industries, even next to the American giant. We have always been pioneers. We've built a fantastic system. Today, this system is in jeopardy, just like other public and private systems are in jeopardy. Now, there is money and technology. There was an Internet company—

[The Chair, Liberal, Hedy Fry]

Thank you very much. You've gone over your time, Monsieur Nantel.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thank you very much.

[The Chair, Liberal, Hedy Fry]

Now, Mr. Vandal for five minutes, and then I'm afraid we're going to have to leave because we are asked to be in our seats in the House by 10:30.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

I don't know if I have five minutes, but I do want to ask a question.

A subscription to daily newspaper The Globe and Mail costs $20 a month. The Winnipeg Sun costs $1.50.

How much does a La Presse subscription cost?

[Guy Crevier]

It's free.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

It's free?

[Guy Crevier]

Yes. Now, the information is free. For example, think of how many websites around the world you can now visit to read about a major tragedy, an explosion, or a plane crash.

We decided to go with the free model, because we think it helps us reach young readers and helps us get new readers.

Over time, will this model evolve and will we offer special, for-pay content? Perhaps, but for now, it's free. That's why we have 260,000 readers.

The free model isn't uncommon. The broadcast model is also a free model. It's just a matter of looking at things differently.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

If I buy the paper on Saturday, how much will it cost me?

[Guy Crevier]

It'll cost almost $3.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

Mr. Breton, do you have any questions?

[Pierre Breton, Liberal, Shefford, QC]

Yes, thank you, Mr. Vandal.

I want to congratulate you on your success in recent years. I avidly read La Presse every morning and all day long.

There are still many forms of traditional media all across Quebec, which is a good thing. How do you think your business model can be transferred?

I come from Granby. I'm sure you know La Voix de l'Est. This newspaper has started transitioning towards digital media. A number of other media and newspapers should follow your model, in my opinion.

How could this business model be adopted outside major urban centres?

[Guy Crevier]

First, I want to say that I was named editor of La Voix de l'Est when I was 29 years old. The first time I ran a communications company was at La Voix de l'Est, so I'm quite familiar with the market in Granby.

The problem with our application is that the newspaper would need a newsroom of about 100 people to produce the required content. The La Presse+ application is very graphics oriented. We need graphic designers, videographers, and photographers. That requires some rather considerable resources. As our application evolves, we develop more and more features. We have a lab of about 100 people. Half of these people are working on developing the application to offer new features, and the other half are improving the productivity of the application.

Over time, we're going to develop a lite version of our application, which will enable a small newsroom to produce the content, but right now, the newsroom will need enough resources to make use of the application.

However, regional newspapers are not feeling the push to transform right now. I think they have another three, four, or five years. Technologies will probably already be developed, and even our own technology should be useful to small newspapers within a few years.

[Pierre Breton, Liberal, Shefford, QC]

Interesting. Thank you.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

The bells are ringing and we need to go for a vote.

I have a quick question and I need a quick answer. How does that impact local news in local communities? Local communities can get your news, but do you have journalists and local news in local communities? Just give us quick yes or no.

[Guy Crevier]

We used to own regional newspapers. We sold some regional newspapers and we have an agreement not to compete with them and to work with them. We do a lot of collaboration with regional newspapers in Quebec. We share a lot of our work and this doesn't cause any problems.

[The Chair, Liberal, Hedy Fry]

Thank you.

I want to thank you for presenting to us. It's very interesting indeed.

[Guy Crevier]

Thank you.