Newsweek Goes Digital
Many in Vienna have been puzzled to learn that another venerable American magazine is about to disappear. At least in print: By January, Newsweek will become an all-online Newsweek Global.
Admittedly the magazine has been troubled for a long time; owned by the Washington Post Company since 1961, the shift to the Internet – particularly pronounced in the United States – cut heavily into the magazine’s advertising revenue. In 2008, with the magazine bleeding red ink, management decided to reposition themselves for a smaller, more elite audience.
They also decided cut circulation in half – on purpose – from 3.1 million in 2008 to 1.5 million by January 2010, discouraging renewals, nearly doubling subscription prices, to $0.90 a mailed copy, raised newsstand prices above that of the competition.
“It’s hugely counterintuitive,” the magazine’s editor Jon Meacham admitted at the time. “The staff doesn’t understand it.” Apparently neither did the readers. Or the advertisers. From a high-visibility circulation of 3.1 million, they virtually dropped off the map.
In August 2010, the magazine was sold for $1 and the cost of its debt to an elderly audio pioneer Sidney Harman. A few months later it merged with former New Yorker editor Tina Brown news website The Daily Beast. Which was also losing money. Brown, like just about everyone else, still hasn’t been able to figure out how to make money in the news business on the Internet.
The puzzle from the outside is to understand how a magazine with a circulation of 3.1 million was unable to make money. Or even 1.5 million. Other magazines, like The Economist, make money at that level, as does The Atlantic Monthly (with a full half online) and many with much less –The New York Review of Books, for instance, at 135,000. Or Profil here in Vienna, at 100,000.
At Newsweek, they guessed, they gambled and they lost.