The Toronto Star is testing the ebook market with a subscription model — a first for a Canadian newspaper. Launched in November, Star Dispatches ebooks are long-form journalism pieces that are produced weekly. In the first of a two-part series, Eric Mark Do looks at the business of ebook production, marketing and sales.
This is part one of a two-part feature on ebooks in the newspaper industry. Read part two for a look at the type of content that is being produced, and what the future holds for ebooks.
By Eric Mark Do
The Toronto Star is testing the ebook market with a dedicated subscription model — something no other newspaper in Canada has tried yet.
Launched in November, Star Dispatches is the brainchild of the Toronto Star's marketing department. There are already over 20 titles of long-form journalism to choose from — ranging from investigations, in-depth health reporting, special reports on events and more. It's labelled as “a new perspective on a news story.” Ebooks are produced every week for subscribers at the price of $1 each, and newspaper competitors are watching to see if the model proves to be successful.
Screen shot / Star Dispatches ebooks as they appear on iTunes
How it works
Sandy MacLeod, vice-president of consumer marketing at the Toronto Star, says their market research showed it took an “incredible amount of marketing” to produce single-copy ebooks that generally sold 100 to 300 downloads at $4.99 each. The math just didn't work out to make a viable business case, he says.
“So we had the thought that, what if we turned this model around a little bit and turned it into a subscription model?”
Subscribers are charged $4.33 plus taxes monthly and receive an email each week with a link to download the newest ebook. A subscription currently includes unlimited access to the Star Dispatches backlist of titles for no extra charge, but in the future those ebooks will likely cost subscribers $1 each. Non-subscribers can purchase Star Dispatches ebooks for $2.99 each.
Any reporter in the Toronto Star's newsroom can pitch to pen an ebook. While it has been mostly feature writers who have had books produced so far, there are titles coming from all genres soon, says Alison Uncles, editorial director for Star Dispatches. Reporters can work on the ebook while also managing their regular duties, but in some cases, up to three weeks of their schedules have been cleared for them to work exclusively on the ebook.
Uncles says that although ebooks are time and labour intensive for reporters, they are worth the investment as reporters are still generating new articles or excerpts that can be published online and in print.
All the production and editing, which is tackled by different editors, is done in-house. The titles are available on the Star Store, iTunes and will also soon be available through the Apple newsstand. MacLeod says the ebooks will eventually be made available on Kobo and Amazon to expand their global reach. But his preference is to attract new subscribers directly through StarDispatches.com and avoid the 10 to 30 per cent cut from sales on external retailer sites.
Star Dispatches is an entity within the Toronto Star. When reporters, editors or a production team works on an ebook, Star Dispatches is billed for that amount at internal rates.
“I'm actually taking a charge against this business model to pay for it, even though those journalists are on staff,” MacLeod says.
In the case of the first title, ORNGE: The Star investigation that broke the story for example, the program didn't get charged for the time it took the journalist to take notes and write articles during the two years of the investigation. However, Star Dispatches was billed for the time it to write the ebook from that material and convert material into ebook formats.
That's similar to The Globe and Mail’s model, where there isn't a dedicated ebook editorial or ebook marketing budget, but there are operational costs to every piece of journalism that is produced, says Craig Saila, director of digital products. Budgets are allocated for the production, editing, assembly, writing and distribution of The Globe and Mail ebooks.
“Most of the marketing that we've done to date has been to existing Toronto Star readers and users,” says MacLeod, adding approximately 50,000 people, who receive the newspaper’s daily headlines email, get the advertisements.
That's in addition to video promotions and ads on The Star website — which attracts 10 million unique visits a month — and excerpts and promotions that appear in print. The target is to reach 10,000 Star Dispatches subscribers by this summer, although The Star declined to state its current subscriber numbers.
Saila says newspapers generally spend more on marketing ebooks than independent publishers do.
“In our case we're working most the time with a company called Booktango to help us assemble that and make sure we get premium placement within the various ebook stores, be it Amazon or Kobo or the like,” he said.
The Globe also advertises ebooks online, in print and an email blast is sent out to subscribers whenever a new one is available. Advertising for ebooks comes out of The Globe’s overall marketing budget.
"There is a cost incurred for the business at large,” Saila said. “By promoting ebooks we're not promoting something else. That's where the real cost is.”
At Hazlitt, Random House Canada's platform for digital publishing initiatives, the approach to promoting an ebook is the same as promoting a print book.
In some cases, an advertising budget is set aside specifically for the ebook, says editor-in-chief Christopher Frey. Hazlitt has been publishing non-fiction ebooks, known as Hazlitt originals for the past six months.
MacLeod and Uncles declined to reveal how many people have signed up for Star Dispatches, but they said 100 new subscribers joined the program in one given day in February, and the retention rate is over 90 per cent currently. The conversion rate of people who sign up after the two free trial books is 20 per cent, which is higher than expected, MacLeod says.
“The challenge we're having, and I'm comfortable in saying this, is this is a new thing,” he said. People are not necessarily catching on quickly to what it is.”
That's a sentiment shared across the industry.
“The market still kind of needs to be developed,” Frey says. “Readers need to be educated that these (ebooks) exist and even, for example, how they consume them and where they find them.”
MacLeod is hoping at least 10,000 readers find their way to Star Dispatches and sign onto the subscription by this summer.
“We're pleased with where we are and at this point we're very optimistic that we'll be still publishing these things in the fall,” MacLeod says. “If we reach our target, this is a very attractive business model.”