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22 Oct, 2012

Newsweek's and The State of the Print Industry.

Business Mismanagement killed Newsweek, not the printed page.

Last week's bombshell that Newsweek is stopping its print publication has sent the internet a flutter. The meta rehash and death knells of print are in full force. But that's not really true.

Anyone who read Newsweek regularly or followed the industry knew this day was coming for a long time now. Story after story of mismanagement, greed and questionable business decisions are mostly to blame. After all, the business of magazine industry is more than healthy.

Magazine ad revenue in the U.S. is seen rising 2.6 percent this year to $18.3 billion, according to research firm eMarketer. That would be the third increase in three years, driven mainly by gains in digital ad sales, though print ads are expected to be flat.

Paid magazine subscriptions were up 1.1 percent in the first half of the year, according to the Audit Bureau of Circulations. And while single-copy sales at newsstands are down 9.6 percent, overall circulation - the bulk of which is in print - is steady compared to a year ago.

The water is so warm for the magazine industry that in the first nine months of the year, 181 new magazines were launched while only about a third as many, or 61, closed, according to publication database MediaFinder.com.

So what happened? Well there are a lot of theories. But the one that seems the most compelling is that Newsweek's management ignored the current business climate.

Notably, Brown did not try to tailor the business to its new realities. The Week, for instance, is a weekly news magazine that might logically have been much more relevant to Newsweek than the Economist. It's a cheaply produced digest of news articles – and a profitable one. But Brown was not having any of that sort of low-rent strategy. Nor has she tried to adapt the Daily Beast to the new structure of online publishing, which needs high-volume traffic to exist on low-cost advertising.

Either way, the final nail in the coffin of Newsweek was that it ignored the new realities of publishing. Namely that of competing with the internet while creating engaging content.