Yesterday Newsweek editor-in chief Tina Brown made the sad announcement that the iconic news magazine would be wrapping up its print publication after almost 80 years of production. Brown has stated that it has been the “incredibly archaic costs of print and the opportunity to expand through digital distribution” that has motivated the decision to move to online only editions. In her announcement to cut the weekly’s print edition she said it was “never a question of whether, it was a question of when” [New York Times 2012]
The transition to digital started back in 2010, when the American weekly merged with opinion website the Daily Beast, forming the Newsweek Daily Beast Company. At the time it was hoped that its merger with the online news site would give it a new lease on life by trimming the magazine’s losses and widening its online audience [New Straight Times 2012].
However this strategy has appeared to be somewhat unsuccessful for Newsweek. According to journalism website Poynter.org, Newsweek’s print circulation has dropped 51 per cent since 2007 [Poynter 2012]. Newsweek’s circulation had plummeted from about 3.1 million in 2007 to 1.8 million in 2010, when The Washington Post Co. sold the magazine to stereo equipment magnate Sidney Harman for $1. This year, total circulation is down to about 1.5 million, less than half of what it was five years earlier, even including about 29,000 digital copies [Sydney Morning Herald 2012].
These figures have been of great concern to many in the magazine industry. The New York Times reported “Many other magazines are likely to suffer Newsweek’s fate. Reed Phillips, managing partner of DeSilva & Phillips, a media banking firm, said he was advising more publications to cut their print operations.
Newsweek certainly isn’t the first to drop its print product due to the high costs of printing and the challenges posed by free online news sites. US News & World Report dropped its weekly print edition years ago and now focuses on the web and special print editions and SmartMoney announced in June that it was going all-digital [Sydney Morning Herald 2012].
So does Newsweek’s decision to cut it’s print edition signal the beginning of the end for a struggling industry?
Mary Berner, president of The Association of Magazine Media certainly doesn’t think so. She said she doesn’t want a decision by one publication to be an indication that the entire magazine industry is ‘going down the toilet’. “Going all digital is a choice that doesn’t reflect the general health of the industry” she says. “The experience of reading the print version of magazines is not going away” [New York Times 2012].
Indeed whilst some magazine publications like Newsweek have struggled greatly to continue attracting audiences, a vast majority of the magazine industry has remained steady. The Audit Bureau of Circulations reported that paid magazine subscriptions were up 1.1 percent in the first half of the year and while single-copy sales at news stands are down 9.6 percent, overall circulation is steady compared with a year ago [Sydney Morning Herald 2012].
In addition many publications have successfully taken steps to add digital formats while maintaining the print product. The Economist has nearly doubled its circulation to 1.6 million from 844,000 a year ago. The Week is up to 541,000 from 525,000. According to research firm eMarketer magazine ad revenue has increased 2.6 percent this year to $18.3 billion, driven mainly by gains in digital ad sales [The West Australian 2012].
So if the rest of the industry is relatively stable and other publications have managed to successfully integrate online distribution as part of their traditional business model, where did Newsweek go so wrong? There have been suggestions that Newsweek’s problem has not been so much a reflection of the rising print costs, but more a result of a magazine who has long been struggling to connect with its audiences.
Sydney Morning Herald reports “Perhaps Newsweek’s decision to stop publishing a print edition in favour for online may be more a commentary on its own problems than a definitive statement on the health of the U.S. magazine industry”. Paul Canetti, the founder and CEO of MAZ, a company that helps magazines publish digital editions commented “Maybe what they’re really facing is an audience-connection problem and not really a print-versus-digital problem at all” [Sydney Morning Herald 2012]. .
There has in particular been a great deal of criticism directed at Tina Brown for the direction she has taken Newsweek in recent years. Or lack of direction that is. News week has failed to capture a segment in the community and have as Forbes so succinctly put it, ‘kept reaching for a mass audience that wasn’t there anymore’ [Forbes 2012].
Samir Husni, director of the Magazine Innovation Center at the University of Mississippi School of Journalism slammed Brown’s performance as Editor in chief saying “Tina Brown took Newsweek in the wrong direction…Newsweek did not die, Newsweek committed suicide” [Sydney Morning Herald 2012].
However there are hopes that the decision to produce a online edition only will be enough to save Newsweek. The all digital format will be called Newsweek Global and will be available for tablet subscribers for USD $2.99 a month or USD $24.99 for a years subscription [NewsWeek 2012]. Tina Brown’s new strategy for Newsweek is to create a subscription/premium site focusing on tablets, with some of its content funneled to The Daily Beast [The New Straight Times 2012]. Perhaps this new business model will make whatever remains of Newsweek sustainable.
Going all-digital could solve many problems associated with the print magazine business. For instance, magazine publishers charge advertisers according to a ‘rate card’ that is based on a promised number of paying subscribers called a ‘rate base’. If subscriptions fall, publishers then must spend a lot of money mailing potential customers and offering heavy discounts just to keep advertising revenue from falling [Sydney Morning Herald 2012].
Moving online could solve that problem, which hit Newsweek in particular, said Tom Rosenstiel, director of the Project for Excellence in Journalism at the Pew Research Center in Washington.
Newsweek is also betting its online future on the fact that there will be enough growth in the number of tablet users by the time the print editions cease running. The magazine expects that the number of tablet users in the U.S. will exceed 70 million this year, up from 13 million just two years ago, Newsweek spokesman Andrew Kirk said. “We have reached a tipping point in the industry at which we can most efficiently and effectively reach … readers in an all-digital format,” he said [Sydney Morning Herald 2012].
Ken Doctor, an analyst with research firm Outsell has his doubts whether a transition to online will solve the deeper problems which Newsweek faces. “I think Newsweek lost its relevance and that is somewhat obscured by the digital transition…it has to be able to stand out in the clutter to survive in the digital world…They just don’t stand out as a must read” [The West Australian 2012].
Only time will tell whether Brown’s decision to produce an online only edition will be enough to save the struggling Newsweek. It will be interesting in a year from now to see how many magazines have followed the same fate. However, for now it seems that the rest of the magazine industry is safe.
To access Newsweek’s online platform Click here.
‘End of Newsweek, a poignant loss’ [New Straight Times]
‘Newsweek’s fading voice’ [Forbes]
‘Newsweek had unique troubles as industry recovers’ [The Sydney Morning Herald]
‘Newsweek ends print run, goes all digital [The West Australian]
‘At Newsweek, ending print and a blend of two styles’ [The New York Times]