Torstar and Quebecor profits plummet
The declining profits for these two large media companies mirrors a trend with across Canada showing that advertising revenue is dropping far faster than the pick up from online.
Torstar, the owner of Canada’s largest circulating daily, reported a 76 per cent fall in its first quarter profit and has cut 105 jobs in its media and book publishing business, Reuters reported. Meanwhile Quebecor’s net income dropped by about half to $35.6 million, in the company’s first quarter results.
The plunging profits for these two large media companies mirrors a trend across Canada showing that advertising revenue is dropping far faster than the pick up from online. In the past few months, The Globe and Mail and Postmedia Network at its Vancouver-based dailies have also announced buyouts, and are hoping paywalls can restore some of the declining revenue.
Torstar’s revenue fell $313.1 million, down $18.4 million from $329.3 million from its first quarter in 2012. “In the face of revenue pressures in certain areas of our business, we remain committed to seeking new revenue opportunity which include the introduction of the paywall at The Toronto Star this summer and our ongoing efforts to grow the Metro franchise across Canada,” said David Holland, president and CEO of Torstar, in a statement.
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For Quebecor, revenues were down slightly by $9.5 million from the first quarter of 2012 to $1.05 billion.
“Unfortunately, in the News Media segment, the latest cost-containment initiatives did not make up for the decrease in revenues during the quarter, which was more significant than in previous periods,” commented Pierre Karl Péladeau, vice-chairman of Quebecor, said in a statement.
“In addition to intense competition from new media, traditional newspapers are also facing large reductions in advertising spending by local and national advertisers,” he added. “Despite signs of a potential recovery in advertising spending in the coming quarters, News Media segment management took immediate steps to adjust its cost structure again in light of the conditions experienced in the first quarter of 2013.”