Today’s announcement of the proposed sale by The Washington Post of its former flagship magazine Newsweek may appear at first to be yet another triumph of the digital media over print publications. However, those loudly proclaiming the sale of Newsweek as signalling another nail in the coffin of the print media are only telling half the truth. In fact, the publishers of Newsweek themselves may well be equally culpable for its demise.
Newsweek has not been a profitable publication for some time. The magazine incurred a total revenue loss of 27 per cent in 2009 in comparison with the year before, including a 37 per cent decrease in advertising revenue. Adding to the misery, circulation figures fell an average of 41.3 per cent in the second half of 2009. These figures seem consistent with the overall swing by consumers towards online access of news content. However on deeper examination in the instance of Newsweek this is not the case.
Don Graham, CEO of Newsweek’s parent publication The Washington Post has publicly stated that it is in fact the failure of the online component to turn a decent profit that has forced the sale of Newsweek. The total revenue of the magazine in 2009 was $184.2 million; only $8 million of which was generated by the publication’s online content. This reversal of the current trend of consumers accessing news information online indicates that something is drastically wrong at the magazine.
Quite simply, it seems that Newsweek’s dramatic fall from grace can be attributed to a failure to adhere to the most basic of business principles; ensuring that the product is in-line with the wants and needs of consumers. At any given time consumers have access to a raft of breaking news and opinion content online. Cheap and rapid to produce, the print media cannot compete with online providers in these genres. Previously, investigative reporting and analyses were the strengths of Newsweek. Consumers sought insightful, well-researched content that online providers had neither the time nor the inclination to produce. Thus, when the magazine made the transition in 2009 from reporting to mostly opinion pieces they made the fatal mistake of conceding the biggest advantage they had over their online competitors.
In the digital age, print publications need to know and exploit their niche to survive. The Economist has successfully managed to use online content to support and enhance the print publication. The magazine is acutely aware of consumer demand for in-depth reporting and investigation in print. Thus, the online component contains one special report updated weekly with the remainder of the information reported being largely opinion-based. This format saw the publication’s total revenue increase 17 per cent in the year 2008-09, with worldwide increase in circulation of 6.4 per cent. The figures speak for themselves; The Economist has successfully identified the demands of consumers and endeavours to deliver them the best of both worlds.
The failure of Newsweek’s publishers to identify and meet the wants of its consumers ultimately led to the magazine’s downfall. They failed to recognise the advantage that print publications have over the digital media: that of the time and resources to devote to in-depth investigation of issues. In order to survive the digital onslaught print publications must deliver a point of difference. They must identify and exploit a unique advantage that the online media fails to provide. The Economist exemplifies that this can be done. It was not digital media that sounded the death knell for Newsweek, rather the failure of the publishers to identify and meet consumer demands that proved fatal.