Jon Meacham Appearing on Charlie Rose, upon the launch of the “new” Newsweek (Last May)
Newsweek’s “intellectually satisfying” new layout may not be working out as planned. Keith Kelley of the New York Post reports today that the Washington Post Company (owners of Newsweek) somewhat hid within their Q4 earnings that Newsweek lost $28.1 million in 2009. Newsweek CEO Tom Ascheim tells Kelly that they expected losses in 2009 and even in 2010 with their lower circulation, but expect to break even by 2011.
We reported last May on the transformation of Newsweek; from a venerable weekly into an Economist-like read for the intellectual elite. As part of the transformation, Ascheim and Meacham laid the groundwork for trimming down its circulation from 3.1 million to 1.2 million. As of January, Newsweek had cut its circulation down to 1.5 million. The circulation cut, which was done to focus on its “core readership,” also laid groundwork for trimming its staffing costs. Newsweek has offered severance to 44 staffers over the last year.
Despite trimming and cover stories such as “The Case for Killing Granny,” “Is Your Baby Racist?” and “Obama is Wrong,” Newsweek struggled with its transition throughout the media meltdown of 2009 (no different than most magazines). According to information from the Magazine Publishers of America the magazine witnessed a 25.9% drop in 2009 ad pages and a $105 million loss in revenue with its print business. Yes, you can blame the gradual circulation change and redesign, but what business could stay in the green with a 30 percent loss in money coming in – no matter how many people you lay off.
Things may turnaround for Newsweek as we continue to come out of the economic tumult (Ascheim notes Q4 was their best), but does the Washington Post Company have the stomach to wait until 2011 to break even? And perhaps more importantly what is their online strategy to offset these losses? Is there a paywall in the future?