Two years ago, Newsweek merged with The Daily Beast with high hopes that the partnership would reinvigorate the brand and bring it into the digital era. With a global economy that now demands lightning quick publishing cycles and new opportunities for advertisers, the merger came too little, too late.
Faced with mounting print publishing costs and the changing media landscape, the 80-year old Newsweek announced that in 2013, it will cease the print version of its iconic magazine, with plans to only create a digital iPad version. This leaves only Time as the last of the major newsweeklies still in print publication, since U.S. News and World Report ceased print subscriptions two years ago.
While Time claims it remains healthy and committed to print, according to managing editor Rick Stengel, the business for publishing a print weekly magazine is no longer realistic and manageable, with paper and postage prices continuing to rise. Last year, Time carried 1,370 ad pages, down almost 50 percent in the past five years. “Will it eventually affect Time?” one media buyer said. “It has to. They’re going to have to evolve their business model.”
Newsweek, as a newsweekly, is particularly susceptible to rising printing and distribution costs, changing media consumption behavior, and an expensive rate base. According to AdWeek, the parent company is expected to lose $40 million this year, much of it due to Newsweek’s cost structure.
By ending the print version, the Newsweek Daily Beast Co. culls a significant portion of its costs associated with printing and distributing a weekly magazine. By no longer having to manage to a rate base or hard overhead costs, the company won’t be trapped in the cycle of having to sustain its print guarantee by continuing to deeply discount subscriptions and maintaining an expensive renewal system.
In a written statement regarding Newsweek’s move toward digital, Newsweek Editor in Chief Tina Brown (pictured) said, “When it comes to print, some realities cannot be ignored. It costs $42 million a year to manufacture, print, distribute, and manage the circulation of Newsweek. Was that any longer the wise use of scarce resources, we had to ask ourselves — all the more insistently after the supportive print ad dollars fell off a cliff across the entire industry in the spring of 2011. After all, an electronic Newsweek could be delivered swiftly and economically to millions. There are now 70 million tablet users in the U.S. alone, and a new report from comScore brings us the sobering — or exhilarating — news that two out of every five Americans now read newspapers and magazines on mobile devices. These readers, and there are more and more of them every day, simply bypass print.”
Brown added, “Exiting print is painful, and poignant, for all of us who love the romance of print and the unique weekly camaraderie of those hectic hours before the magazine’s ‘close’ on Friday night. But if there’s one thing that Newsweek has never shied away from since its first issue in 1933, it’s innovation.”
With additional potential layoffs imminent, among the executives who will not be making the transition to digital are Mark Miller, a longtime Newsweek editorial director whom Editor In Chief Brown brought back in 2011 to oversee editorial operations after he’d quit the year before; fashion journalist Robin Givhan; and features director David Jefferson.
Said Miller, who is leaving voluntarily amid layoffs: “This seemed like a good moment to move on myself when things here are wrapped up with the print edition of Newsweek,” adding that he will be “helping Tina and the rest of the team” through mid-January with their transition to all-digital.