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?
Here is an interesting part of their conversation on how Meacham is trying to create a sustainable revenue model for Newsweek by cutting its circulation numbers in half and following in the footsteps of the Economist with an intellectual and deeply analytical approach to reporting:
CHARLIE ROSE: Chapter one of the new “Newsweek.”
JON MEACHAM: Chapter one. What we have to do is go to our base. As you will feel there, this is better paper. It’s a more handsome magazine. We have been doing this for 76 years, and I want to say quickly, we stand on the shoulders and in the shadow of all the folks who have put this out, put this out week in and week out. And this is not a reflection on what we have been. It’s about what we have to become. We’ve been at 2.6 million subscribers for a long time. Mass audience. Costs a lot of money to print that many magazines, put them on trucks and deliver them. We’re going to bring that down. We’re going to charge a little bit more for it. Still less than $1 dollar a week, I think, for most folks, which is much less than a cup of coffee in most urban places. And ask people who care the most to pay a little more, and then be able to take that demographic, that audience, and tell advertisers this is who you’re reaching. You want to reach these people, because they’re people who watch you. They’re people who watch “Meet the Press.” They are people who hopefully buy hardback books about history.
And our calculation — our research shows that there are about 28 million people. I sometimes think of it as the virtual Beltway. You may not live in Washington, but you are part of that sensibility. And you read a lot, and you check into the electronic kinds of conversations.
CHARLIE ROSE: Let me read your page about this. “A new magazine for a changing world. As we see it, ‘Newsweek’s’ role is to bring you as intellectually satisfying and as visually rich an experience as the great monthlies of old did, whether it was Harold Hayes’s ‘Esquire’ of Willie Morris’s ‘Harper’s,’ but on a weekly basis.
“In our interview last Wednesday afternoon on Air Force One, President Obama noted one of the key lessons he had learned. Americans not only have a toleration but also a hunger for explanation and complexity and a willingness to acknowledge hard problems. ‘I think one of the biggest mistakes that is made in Washington is this notion you have to dumb things down for the public.’ That was the president. You say we could not agree more.”
And I say I totally believe that. You know, in terms of the response that you get when people find interesting things done in an interesting and intelligent way. You know, there is — it lights up the human experience.
JON MEACHAM: Yes. And it’s about character, and it’s about people, and it’s one of the reasons we wanted to start with Obama, who is the, agree or disagree, the most fascinating figure of the age.
