New digital development lab will focus on business-to-business products.

By H.G. Watson, Associate Editor

There hasn’t been a lot of good news at Postmedia lately. But senior management is hoping that a new venture in one of Ontario’s technology centres might be a good news story.

On Aug. 2, Postmedia announced it is opening a new digital development lab at Communitech, an innovation centre based in downtown Kitchener, Ont.

“As we embark on a journey to try to transform our business model we believe that a lot of our success again will be predicated on our ability to work with the dominant new platforms,” Andrew MacLeod, executive vice president and chief commercial officer at Postmedia, told J-Source, citing both Google and Facebook. “In order to do that we are seeking to accelerate our ability to develop products, services and solutions in the language of these new platforms.”

Earlier this year, Postmedia merged several newsrooms and laid off 90 employees. On July 8, President and CEO Paul Godfrey announced a plan to reduce the company’s $648 million debt.

“The problem we are trying to solve is that like all legacy media companies, our core business model has been deeply disrupted,” MacLeod said. “We can no longer create audience by generating editorial content and then monetize that audience through advertising. That model is basically broken.”

“We are trying to find new products, services and solutions that will let us monetize the assets we have inside this company,” he added, noting that they believe that to be successful, the new products they develop have to be fluent in the language of search and social.

Two new staffers, an Innovation Manager and Development Lead, are going to be hired for the lab who will lead the new team, which will primarily include engineers and developers. MacLeod would not give any specifics about the resources Postmedia is dedicating to this new venture, but said that the company is putting a lot of resources behind finding new strategies. “We deeply believe in the value of what we do,” he said.

MacLeod said they are still working through what the team will be developing. Right now, however, he did add that they are looking at what kind of platforms people are consuming media on, and how they develop new business-to-business products and services. “I would say…it’s more to the B2B side,” he said—essentially, working on revenue generating content products that will be sold to Postmedia’s business customers.

Some of the content solutions the lab may work on could have uses both commercially and editorially. For example, if the lab develops ways to engage more users with their business content, those same practices could be applied to news stories. “I think there is some symmetry between both worlds,” he said. “But I say that not because I think there is not an important demarcation between commercial and editorial—there’s a critical demarcation between the two—but I do think there is an opportunity to leverage the same skill sets (to) create, distribute and then measure that’s interesting to both the editorial side of the house and also to the commercial side of the house.”

Communitech, the lab’s new home, was founded in 1997. MacLeod said they chose Kitchener-Waterloo because of the pool of talent available in the area and the innovative culture that exists in the two cities.

In 2015, Thomson Reuters also opened an innovation lab in Communitech, focusing on “innovation and partnership” according to a press release. Among the other tech companies sharing the former Lang Tanning Company building with Communitech are Desire2Learn, a software company that makes educational products, and Google.

The new lab should be up and running by September—and they have a tall task in front of them. “To not try to develop a new lifeboat when your existing boat is sinking would be akin to going into palliative care, and we are not doing that. We genuinely believe there is a future for our industry,” MacLeod said, though he added that it might look different than it has in the past.

H.G. Watson can be reached at hgwatson@j-source.ca or on Twitter.

H.G. Watson was J-Source's managing editor from 2015 to 2018. She is a journalist based in Toronto. You can learn more about her at hgwatson.com.