11/05/2014 02:47 EST | Updated 01/05/2015 05:59 EST

Toronto Star to drop digital paywall in 2015

Torstar Corp. plans to remove the digital paywell on the Toronto Star in fall 2015 and simultaneously launch a new tablet app.

Removing the paywall, which went up in 2013, could have an impact on circulation revenue, but may lure advertisers back into the fold, Torstar CEO David Holland said after releasing third-quarter earnings for the chain.

"This is an important strategic step forward for the Star and for Torstar as we commit to our future of cross-platform, a future that we recognize will be increasing mobile," Holland said.

Torstar is working with Montreal’s LaPresse to develop a new tablet edition, geared to readers on tablets who are willing to read more in-depth treatment.

LaPresse launched a platform technology in 2013 that presents news and information in an “interactive environment” that blends print with mobile and video elements.

Younger readers stay longer on tablets

 The tablet version at LaPresse has attracted a younger audience who may never have read a paper edition of a newspaper.

The company said readers of the La Presse tablet edition are using it for an average of 45 minutes a day, and up to an hour on Saturdays.

"These are numbers we've haven't see in the digital world at all to date. We're tremendously excited about that," said John Cruickshank, publisher of the Toronto Star and president of the Star Media Group.

Torstar expects to spend $1 million to $2 million in the fourth quarter on the project and an additional $10 million to $12 million in 2015.

Like most newspapers, the Star, Canada's largest newspaper, has struggled with declining readership and falling ad sales. Print advertising revenues at the Star Media Group, which includes the Star and the free Metro tabloids, were down 19.7 per cent in the year to date, Torstar said in an earnings report.

Losses for Torstar

Digital revenue rose by 2.2 per cent in the same period and failed to replace revenue from print ads.

Torstar, which also owns the Hamilton Spectator, Guelph Mercury and 100 community newspapers, has shut down operations in three smaller markets and sold its Harlequin publishing division to News Corp. for $455 million.

Excluding the sale of Harlequin, the company reported a net loss from continuing operations of $87.0 million or $1.08 per share in the third quarter compared with a loss of $80.2 million or $1.01 per share in the same quarter last year.

Operating revenue slipped to $199.9 million from $215.7 million in the third quarter of last year.