Accuracy in Media

Newsweek announced today that after nearly 80 years, it will cease publishing the magazine in print and go all digital in 2013. They are basically throwing in the towel on the disastrous merger of Newsweek and The Daily Beast.

Newsweek editor Tina Brown announced the change in the magazine’s Tumblr blog:

To: All Staff

We are announcing this morning an important development at Newsweek and The Daily Beast. Newsweek will transition to an all-digital format in early 2013. As part of this transition, the last print edition in the U.S. will be our December 31st issue. Meanwhile, Newsweek will expand its rapidly growing tablet and online presence, as well as its successful global partnerships and events business.

Newsweek Global, as the all-digital publication will be named, will be a single, worldwide edition targeted for a highly mobile, opinion-leading audience who want to learn about world events in a sophisticated context. Newsweek Global will be supported by paid subscriptions and will be available through e-readers for both tablet and the Web, with select content available on The Daily Beast

Four years ago we launched The Daily Beast. Two years later, we merged our business with the iconic Newsweek magazine – which The Washington Post Company had sold to Dr. Sidney Harman. Since the merger, both The Daily Beast and Newsweek have continued to post and publish distinctive journalism and have demonstrated explosive online growth in the process. The Daily Beast now attracts more than 15 million unique visitors a month, a 70 percent increase in the past year alone – a healthy portion of this traffic generated each week by Newsweek’s strong original journalism

At the same time, our business has been increasingly affected by the challenging print advertising environment, while Newsweek’s online and e-reader content has built a rapidly growing audience through the Apple, Kindle, Zinio and Nook stores as well on The Daily Beast. Tablet-use has grown rapidly among our readers and with it the opportunity to sustain editorial excellence through swift, easy digital distribution – a superb global platform for our award-winning journalism.  By year’s end, tablet users in the United States alone are expected to exceed 70 million, up from 13 million just two years ago.

Currently, 39 percent of Americans say they get their news from an online source, according to a Pew Research Center study released last month. In our judgment, we have reached a tipping point at which we can most efficiently and effectively reach our readers in all-digital format. This was not the case just two years ago. It will increasingly be the case in the years ahead.

It is important that we underscore what this digital transition means and, as importantly, what it does not. We are transitioning Newsweek, not saying goodbye to it. We remain committed to Newsweek and to the journalism that it represents. This decision is not about the quality of the brand or the journalism, that is as powerful as ever. It is about the challenging economics of print publishing and distribution.

Newsweek is produced by a gifted and tireless team of professionals who have been offering brilliant work consistently throughout a tough period of ownership transition and media disruption. The inexorable move to an all-digital Newsweek comes with an unfortunate reality. Regrettably we anticipate staff reductions and the streamlining of our editorial and business operations both here in the United States and internationally. More details on the new organizational structure will be shared individually in the coming weeks and months.

We realize news of a big change like this will be unsettling. We wish to reassure you the transition is well planned, extremely mindful of the unavoidable impact on our staff and respectful of our readers, advertisers and business partners.

There will be an all-staff town hall meeting at 11am on the editorial side of our floor to answer your questions and address your concerns.

Tina Brown & Baba Shetty

The announcement isn’t a big shock. Bloomberg estimated that Newsweek would lose $22 million this year amid a continued advertising slump and readers choosing digital over print in larger numbers.

In July, majority owner Barry Diller sent shivers through the magazine when it was reported that he said that Newsweek was going digital in September.

That forced Brown to issue a memo to calm Newsweek staffers.

From: Brown, Tina
Sent: Wednesday, July 25, 2012 4:11 PM
To: All Newsweek Daily Beast Employees
Cc: Newsweek Business Staff
Subject: Scaremongering

Barry Diller would like to make it clear that he did not say on the earnings call as reported that Newsweek is going digital in September.

He made the uncontroversial, industry-wide observation that print is moving in the direction of digital.

Below, in summary, are the points he actually made on the IAC earnings call when he was reporting the tremendous results of the company this quarter.

1/The Newsweek brand is strong, and far stronger than it has been in years.
2/We wouldn’t finance The Daily Beast at anywhere near the level of ‘12
3/That eventually, over time, digital would replace much of print (hardly a controversial revelation)
4/In September we would be evolving our plan for the year ’13, with many options to choose from.

I am enroute to Jane Harman’s event in Aspen and I am sorry that I am not able to reassure you in person but I will be back in the office on Monday. Please refer any queries to Stephen.

Best,
Tina

While shuttering the print edition of Newsweek will save the company money in overhead and printing and distribution costs, it remains to be seen whether or not that will be enough to offset the loss of print ad revenue and make the new all-digital magazine profitable.





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