The country's largest newspaper publisher, Postmedia Network Canada Corp., has announced a shakeup of its senior management team with the departure of three top executives – including the person in charge of its much-touted "digital first" strategy.
Postmedia's restructuring of its executive ranks, announced on Tuesday, is the latest sign of the mounting pressure on Postmedia to speed up the transformation of its aging stable of newspapers into digital media enterprises. Like other print media companies, it is seeking to boost digital sales to compensate for falling revenue from advertising and circulation in its printed newspapers.
Malcolm Kirk, the company's executive vice-president of digital media, is among the three departing executives. The former publisher of the Calgary Herald, Mr. Kirk was appointed to Postmedia's new senior management team when the company emerged from restructuring in July, 2010.
Mr. Kirk's departure was surprising, since he was lauded within the company for spearheading digital efforts at the Herald, and had been brought to Toronto specifically to oversee the strategy of the company's digital properties, including the websites of its newspapers such as the National Post, the Vancouver Province and the Montreal Gazette.
In an interview, chief executive officer Paul Godfrey would not explain the reason for the management shakeup, saying he does not comment on personnel matters.
However, according to a person familiar with the decision, the management shakeup was triggered in part by Mr. Godfrey's frustration that the company was not building its digital revenues fast enough.
"Paul hasn't been satisfied with the progress of the digital team," the person said.
Because it emerged from a period of restructuring after the bankruptcy of former owners CanWest Global Communications Corp., Postmedia "appears to have had a late start in moving the digital business forward," Canaccord Genuity analyst Aravinda Galappatthige wrote in a research note in August. While Postmedia's digital sales now account for roughly 9 per cent of total revenue, it lags behind other print media competitors, such as Torstar Corp., whose digital revenue sits at roughly 12 per cent of their total.
Earlier this year, Postmedia began experimenting with charging readers for access to articles on its website, once they passed a monthly limit of free content. So far, the "metered model" has been in use only at the Gazette and the Victoria Times-Colonist, which was recently sold along with a number of the company's community papers in B.C. Mr. Godfrey has said the company will begin rolling out pay walls on its websites across the rest of the newspaper chain.
Tuesday's shakeup is also a vote of confidence in Wayne Parrish, Postmedia's chief transformation and revenue officer, whose responsibilities have been growing since he joined the company as it emerged from restructuring last year. He will now take over Mr. Kirk's duties, overseeing the digital strategy. Mr. Parrish, who worked under Mr. Godfrey as a senior executive at Sun Media Corp. in the '90s, is in charge of a wide swath of Postmedia's business operations including sales, digital properties, and other business ventures.
The move does not signal a change in strategy for Postmedia, Mr. Godfrey said. The company has just completed a year of deep cost-cutting across its ranks and is now focused on building revenue, especially from its digital network of websites and apps for mobile devices.
"We're quite emphatic ... that our strategy continues to remain," he said.
Scott Anderson, Postmedia's senior vice-president of digital content strategy and the managing director of canada.com, is also leaving the company. Lou Clancy, former editor-in-chief of the Toronto Sun who was named head of Postmedia's editorial operations earlier this year, will take on his responsibilities.
Chief information officer Ed Brouwer is also affected by the shakeup. His duties will be absorbed by the central IT group based in Winnipeg, known as Business Technology, which is overseen by chief financial officer Doug Lamb.