In 2011 the Toronto Star was Canada’s largest circulating newspaper, however since then they have seen a steady decrease in readership levels. In the last quarter operating revenue fell 7.3% and the number of subscribers continues to decrease. In order for them to return to the success that they have reached before, the Toronto Star is adapting a new business model which will change the way that they make money and attract customers.
Currently the Toronto Star profits off a “paywall” strategy. This means that they charge readers to view their site and their online content. Infact a similar strategy is used by the ‘Globe and Mail’. However, due to the surplus of free content available on the internet already and the falling number of subscribers they have come to the conclusion that there is more revenue is to be made through add placements and through the development of a free tablet application.
Although changing their business plan means changing the way in which the company profits it will allow for more growth. Consumer’s have unlimited resources for which they can view at no cost to them. Indeed, this new strategy that they are adopting will not only engage a larger audience, but it will help them attract a younger audience. The youth of today are not the type of consumer which intents to pay to view news articles that could be found on various websites for free. The action of making their content more accessible will make their site more attractive towards the student population.
In the long run this strategy that the Toronto Star is adopting will help them generate an increase in profit compared to previous levels. Although the company will lose their method of earning revenue for every subscriber they receive, they will now be able to attract more costumers and charge an increased price for advertisements on their website and on their tablet application.
Sources
http://www.theglobeandmail.com/report-on-business/torstar-swings-to-profit-on-boost-from-harlequin-sale/article21452577/