BUSINESS

Torstar looks to small company Blue Ant to drive content for tablets, phones

12/23/2011 02:39 EST | Updated 02/22/2012 05:12 EST
TORONTO - Newspaper publisher Torstar Corp. wants to deliver more content to Canadians on tablets, smartphones and other mobile devices, and executives say investing in a TV startup run by the former head of Alliance Atlantis will help make that happen.

On Wednesday, the owner of the Toronto Star announced that it was back in the TV business, an area in which the media company has struggled to find success, with the purchase of a 25 per cent stake in Blue Ant Media Inc.

While Torstar's past forays into TV were met with mixed results, this time the company has paired with Michael MacMillan, a founder of Alliance Atlantis who also helped launch some of Canada's most successful specialty TV channels in the 1990s, including Showcase and the Food Network.

Blue Ant, MacMillan's new company, owns a slate of specialty channels, a few Canadian magazines and focuses on creating its own original content.

Earlier this year, MacMillan made his intentions clear with the purchase of a stake in GlassBOX Television, owner of specialty channels Travel+Escape, Bite TV and AUX TV.

He said he was attracted by the channels' approach to content which was distributed on TV, its websites and mobile devices. That way of thinking is something he hopes to emulate at Blue Ant.

"We aren't married to old ways of doing things or old assumptions about new technology," said MacMillan.

"Our idea is to become a strong content-focused media company, delivering interesting content over all platforms, whether it's TV, smaller screens like mobile or tablets — whatever."

Blue Ant will also take the multi-platform sensibility to four premium high-definition of channels it acquired from High Fidelity HDTV Inc. — Oasis HD, HIFI HD, Eqhd, and RadX.

Torstar's investment carries relatively low risk for the media company. It will first give Blue Ant a cash injection of $22.7 million in exchange for its stake, as well as the potential to generate content for their numerous websites.

"We believe in the diversity of assets and this gives us a nice opportunity to achieve some further diversification of our Canadian media asset base," said Torstar chief executive David Holland.

"When you think about the potential between the specialty TV channel and digital, there's probably some opportunity there."

The shift is the latest in a long line of attempts by Torstar to find success on the TV set, where it has been burned in the past.

The company was shot down by the Canadian Radio-television and Telecommunications Commission nearly 10 years ago when it tried to launch TV stations in Toronto, Hamilton and Kitchener-Waterloo, all areas where it owned papers.

Last year it shed its 20 per cent stake in CTVglobemedia, owner of the CTV stations, for $345 million to BCE Inc. (TSX:BCE).

But executives at the company emphasize that the investment in Blue Ant is different than previous attempts.

"With CTV we were buying a very, very established network media business," Holland said. "With Blue Ant they're at a much more formative stage, and we think that the value opportunity is real."

Torstar is known primarily as the publisher of the Toronto Star and Harlequin romance novels, though it owns numerous digital properties including Thestar.com, Toronto.com and Workopolis.

However, Torstar said it doesn't plan to use Blue Ant to make news-oriented content at this point, though Holland said its high-definition travel programs could be a solid fit.

"We've had a long history of publishing travel content and servicing travel advertisers, if something emerges," he said.

Holland characterized the investment in Blue Ant as one that leaves much of the decision making in the hands of MacMillan, who he says has a certain vision.

"We think we've got interesting ways of creating and delivering content," MacMillan added.

Large media companies have long tried content sharing and branding agreements that stretch across various platforms, most notably CNN's failed rebranding of several news programs to reflect the names of popular magazines owned by Time-Warner.

Recently, some media companies have tried a different approach to content sharing. Gannett Co., owner of newspapers like USA Today, as well as many TV affiliates, has started sharing some of its television news reports with the USA Today website.

In Canada, The Globe and Mail website often features video clips from BNN, its sister business cable channel.

MacMillan said it was too soon to iron out exactly where Torstar and Blue Ant will fit into the current practice of content sharing.

"Our goal is to not just be a broadcaster, but to be a content company that creates and owns content, and we can deliver it in whatever means we can think of," he said

"I want to be cautious (about suggesting) that we have some secret solution to the media future, but we've got exciting ideas and we'll show them in due course."