Another famed magazine, albeit online only now, is facing an uncertain future. Newsweek is for sale, and many in the media are depressed to see the once mighty weekly reduced to a name for sale.
Here’s the story from the New York Times.:
Newsweek, the once-venerable magazine that experienced one of the most precipitous declines in media over the last decade, is up for sale.
In an internal memo that has been widely circulated on the Internet, Tina Brown, the editor in chief, and Baba Shetty, the chief executive, told the staff that they had decided to sell now so that they could focus on building the companion brand, The Daily Beast.
“Newsweek is a powerful brand, but its demands have taken attention and focus away from The Daily Beast,’’ the memo said. “The story that hasn’t been told about The Daily Beast is its strength.”
The memo added that its owner, IAC/InterActiveCorp, will sell only if the purchase price “reflects the value we’ve created.” The company will continue to run the brand if there are no takers.
While a spokesman for Newsweek Daily Beast did not respond to an e-mail request for comment, the media world erupted on Twitter. Word that the magazine would be put up for sale was first reported by Variety on Tuesday evening.
“Saddest thing in Newsweek-for-sale memo: They’re not peddling a magazine or journalists, but ‘the Newsweek brand,’” wrote the journalist Walter Shapiro.
The possible sale follows a rapid decline for Newsweek, which had 3.3 million readers at the height of its circulation in 1991 and used to be a major rival of Time. In 2010, the Washington Post Company sold the magazine for a dollar to Sidney Harman, a 92-year-old audio magnate who died a year later. Mr. Harman had merged Newsweek with The Daily Beast, the Web site owned by IAC.
Variety, which broke the story, had this background and the details of the struggling model for the brand:
IAC obtained its stake in Newsweek after it merged the Daily Beast with the venerable publication in 2010, under an agreement with investor Sidney Harman, who had recently bought the magazine from the Washington Post.
But all signs are that the publication — which the Washington Post Co. sold for $1 and assumption of liabilities — has been a stepchild to the Daily Beast.
IAC’s Barry Diller last month signaled his unhappiness with the purchase, telling Bloomberg TV that “it was a mistake” to buy the publication and a “fool’s errand if that magazine is a news weekly.” While praising the journalists who work there, he said that he did “not have great expectations” for the digital product.
Newsweek renamed its digital tablet edition Newsweek Global, although print editions still exist overseas under royalty arrangements. IAC is pitching the opportunity to “innovate” a business model, with an emphasis on narrative journalism and plans for one-advertiser-per-article sponsorships. A “soft” launch of a redesign of its Newsweek website earlier this month includes the same content as the tablet edition, and the company has announced plans to move to “metered” Internet access with subscriptions at $2.99 per month.
While Newsweek isn’t a business publication, it’s still hard to see the business of media failing. It’s unlikely that anyone would purchase the brand, especially have the tarnishing it’s taken from being merged with The Daily Beast.
And Variety reports, fewer people are seeing it as a must read:
According to sources who have been briefed, Newsweek’s 1.5 million subscribers, in the quarter before it ended its print edition, fell to 470,000 in the first quarter of this year, with estimates that it will continue to decline throughout the year.
The figures showed positive operating income before amortization, but negative cash flow.
Online traffic declined from 2.9 million unique visitors in January, to 1.9 million last month, according to those who have seen the numbers.
Losing 1 million viewers in the first quarter isn’t exactly selling at a high point. And with declines projected to continue, it may be hard for IAC to get rid of the brand. Sadly, it might just be better to fold it instead of watching it die a slow death.
But what I find even more distressing is simply another source for well-reported, unbiased content will be lost. In the age of the internet, putting content online and asking people to pay for it requires some differentiation which Newsweek just wasn’t able to achieve.
