Newsweek Bails on Print … 5 Billion Pages Gone

Jeff Hayes
Oct 18, 2012

Newsweek, the venerable 79-year-old weekly magazine announced it will discontinue its print edition to become digital-only by the end of the year. The publication has been struggling for years with circulation dropping from over 4 million in 2003 to around 1.5 million in 2012. By my estimate the decision will eliminate approximately 5 billion 8.5×11 equivalent pages from the printing industry and 79 million pieces of mail per year.

Tina Brown, Newsweek’s editor-in-chief, broke the news on The Daily Beast which is also controlled by IAC/InterActiveCorp. Ms. Brown, in explaining why the publication is going digital-only stated, “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.”

Ahhh, how quickly people change their views. Less than two years ago when IAC/InterActiveCorp CEO Barry Diller was finalizing negotiations with Newsweek on a 50/50 joint venture with The Daily Beast he stated,  “Advertisers like to have a print representation of what they’re trying to say if it’s tied well and into this very fast-moving Internet publication.” Diller cited the benefits for Daily Beast journalists by noting “They’ve been deep in the mess of the Internet for the last two years. Taking that experience and that sensibility and going left toward print is actually a good industrial combination.”

The Tipping Point

Today, Newsweek pointed out some salient data that contributed to their decision to turn off the presses:

  • 39 percent of Americans say they get their news from an online source, according to a Pew Research Center study released last month
  • Tablet users in the United States are expected to exceed 70 million, up from 13 million just two years ago

Ms. Brown noted, “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.”

As I noted in my blog back in July 2010 Digital vs. Print: Tipping Point for the Publishing Industry and April 2011 Tipping Point Revisited, if this isn’t the tipping point, then we are very close to it. Folks, we’ve tipped.

 

U.S. Value of Commercial Print and Digital Advertising 1989 to 2015

Content, Audience, Connections

Now one could argue that Newsweek’s announcement says less about the viability of print as a medium and more about the relevance of a national news publication in a time when people increasingly get their news and analysis for free on the web. It’s great to blame print economics as the major issue to soften the blow to their editors and reporters who will be losing jobs because of the lack of ad revenue for an outmoded publication.

But one could also argue that in an era when people get most of their news and analysis for free (at least the basic stuff) print doesn’t compete very well. I believe we will continue to see other publications further increase prices for print-based subscriptions or stop offering print-based products. Meanwhile, major national news publishers (WSJ, NYTimes, Financial Times, Hearst, etc.) are successfully erecting paywalls for much of their premium digital content in an effort to be less dependent on advertising and to replace lost print subscription revenue. Check out this graphic for a 60-year view of U.S. print newspaper advertising revenue.

InfoTrends research shows that publishers are focusing on generating premium content, increasing audience through digital channels, and building deeper insights for connecting readers and advertisers. Ms. Brown noted that “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.”

Print and marketing services providers need to follow suit by investing more in creative/analytics/IT services and less in production/delivery services.

Ms. Brown closed by saying, “Exiting print is an extremely difficult moment for all of us who love the romance of print and the unique weekly camaraderie of those hectic hours before the close on Friday night. But as we head for the 80th anniversary of Newsweek next year we must sustain the journalism that gives the magazine its purpose–and embrace the all-digital future.”

And so it goes.

Jeff Hayes
President

 

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