Postmedia Network, Inc., the company that owns the National Post, will take a minority interest in The Logic, a subscription-based online news service that reports on the innovation economy.
The deal is in its early stages and terms have not yet been agreed, but a letter of intent signed Wednesday will see Postmedia invest in The Logic and offer a selection of its work through online products including the National Post and various city papers.
Some of The Logic’s content will be available to National Post readers, while some will remain restricted to paying subscribers.
The Logic launched last year as a subscription based news service that also offers conference calls and daily briefings focused on tech and innovation. It has published ground-breaking work on issues such as Toronto’s dealings with Sidewalk Labs, and Facebook’s controversial advertising policies.
The innovation economy is thriving in Canada and The Logic has tapped into the stories and insights that make it tick
Headed by David Skok, formerly of the Toronto Star and Boston Globe, The Logic will retain its independence, and will continue to serve its community of subscribers, while also trying to expand it through the vastly larger distribution network of Postmedia.
“The premise is that tech is not a siloed vertical, it really is the future of Canada,” Skok said in an interview. For a small startup, he said the investment and access to distribution will allow the news operation to grow and hire more journalists.
Skok said that offering for free what it has so far charged money for will not dilute the value of his team’s work any more than the syndication strategies used by large American media outlets such as The New York Times and Washington Post. On the contrary, he expects it to lead to more subscribers through greater visibility.
“It’s another bet on journalism for Postmedia,” said Postmedia CEO Andrew MacLeod in an interview.
He described the partnership as a “graceful” way of simultaneously chasing the proven potential of digital subscriptions, while not threatening the company’s broader strategy of digital advertising.
Putting up increasingly strict paywalls in pursuit of subscription dollars is a common strategy, but can be at cross-purposes to a digital advertising strategy that aims at the largest possible audience.
MacLeod said there is evidence, however, that people are willing to pay for certain “bespoke” content bundles, such as The Logic, and these can be profitable.
MacLeod also described the investment as something of a test for that strategy, which could be replicated in areas other than the innovation economy, such as food and wine or sports.
“The innovation economy is thriving in Canada and The Logic has tapped into the stories and insights that make it tick while demonstrating, in a very short period of time, its strength and credibility in the space,” MacLeod said in a statement. “Partnering with The Logic provides the opportunity to build, grow and validate digital subscription models which are showing increasing traction around the world.”