Six months ago, Newsweek embarked on a bold effort to staunch its losses in a brutal economic time, with a major redesign, price increases, a steep reduction in circulation, and a continuation in a long series of steps away from weekly news and toward commentary and analysis. From the legion of people in the media who write about one another’s organizations, there was plenty of scepticism, even some derision.
Last week, Newsweek laid off 13 people from its already depleted editorial staff, but the reaction from the professional media watchers was muted, notably lacking in declarations that the strategy had failed and that the magazine was doomed.
After quoting the editor, Jon Meacham, as saying that the future remained promising, even the reliably sardonic Gawker.com added only this comment: “Can’t blame him, really. Tough times.”
Whether Newsweek’s plan pays off eventually, this is a time when even smart strategies can fail, and Newsweek has plenty of company in the struggle.
Through the first nine months of the year, the volume of advertising in American magazines fell 27.2% from the period a year earlier—29.2% for Newsweek—and dozens of magazines have closed, including big names such as Gourmet, Domino, Vibe and Hallmark Magazine.
Newsweek decided to stop the expensive pursuit of high circulation and focus on a smaller readership of higher-income people who appeal to advertisers. Many publications have made similar moves, but few have gone as far; Newsweek lowered its rate base, the minimum circulation promised to advertisers, from 3.1 million to 2.6 million in early 2008, then to 1.9 million in July. It will go to 1.5 million in January.
With the combination of fewer ad pages and fewer copies, the magazine’s owner, the Washington Post Co., reported that Newsweek’s ad revenue in the third quarter was down 48% from last year.
But because of cost-cutting and price increases, the outlook appears, if not good, then a little less bad than it did earlier this year.
The Washington Post Co.’s magazine division, which is primarily Newsweek, had a third-quarter operating loss of $4.3 million (around Rs20 crore), after losing $25.4 million in the first half of the year.
“It’s been a disgusting economy, in case nobody else noticed,” said Thomas E. Ascheim, the chief executive of Newsweek.
He said revenue per subscriber was up, adding that in 2010 “we expect to operate less in the red” and holding out a hope of profitability in 2011.
©2009/The New York Times