3 Min Read
(Adds tablet app and conference call details, share move)
By Alastair Sharp
TORONTO, March 2 (Reuters) - Torstar Corp will pour more money into the tablet version of its Toronto Star newspaper and expand in online community forums this year as it tries to offset sharp drops in print advertising with a greater focus on digital efforts.
The publisher, which reported weaker-than-expected results on Wednesday, said it planned to invest C$10 million ($7.43 million) in its Star Touch tablet edition in 2016 after spending slightly less than that in the fourth quarter. It expects the venture to break even in 2017.
Introduced five months ago, the app has been downloaded 200,000 times and has 65,000 weekly and 26,000 daily users, who typically spend more than 22 minutes a day on it, the company said.
Advertisers are responding positively and appreciate the "unique creative executions they can achieve on the platform," Star Publisher John Cruickshank said on a conference call.
Torstar did not break out revenue from the tablet edition, but said overall digital sales increased 27.3 percent in the fourth quarter, boosted by its majority stake in online media company VerticalScope.
Since investing in VerticalScope in mid-2015, the company has spent millions buying online community forums on hunting, fishing, autos and other topics. It plans to reinvest VerticalScope's free cash flow in its growth.
Digital advertising revenue at the Star Media group, which includes Star Touch and thestar.com, fell 4.1 percent in 2015.
Torstar, which also owns a string of community and commuter newspapers, has cut costs as revenue has fallen, outsourcing printing of the Star and killing the print version of the Guelph Mercury in January.
The company posted a surprise fourth-quarter loss due in part to the Star's slumping print ad sales.
Excluding items, the loss of 10 Canadian cents per share compared with the analysts' average estimate of a profit of 2 Canadian cents, according to Thomson Reuters I/B/E/S.
The company wrote down its newspapers' value by more than C$200 million, contributing to a net loss of C$233.4 million, or C$2.90 per share, from continuing operations, compared with a year-earlier profit of C$20.9 million, or 26 Canadian cents a share.
Revenue fell 8.4 percent to C$213.7 million.
Torstar stock was down 1 percent at C$1.94 at midday. It had been above C$7 in early 2015.
The company said national print advertising dropped 28 percent, while advertising across its Metroland community media operations fell 5.8 percent.
$1 = 1.3454 Canadian dollars Additional reporting by Manish Parashar in Bengaluru; Editing by Shounak Dasgupta and Lisa Von Ahn