With 'Newsweek' for sale, an era fades

As the American conversation has become harder to sum up in a single cover, that era seems to be ending. The Washington Post Co announced on Wednesday that it would sell ‘Newsweek’, raising questions about the future of the newsweekly, first published 77 years ago.

Donald E Graham, chairman and chief executive of the Washington Post Co, said that the decision was purely economic.

“I did not want to do this, but it is a business,” he said. The magazine would lose money in 2010, he said, and “we don’t see a sustained path to profitability for ‘Newsweek’.”

The move comes as companies have been sloughing off and revamping other mass magazines. ‘TV Guide’ was sold for $1 million to a private equity firm; ‘Businessweek’ was sold for $5 million in cash to Bloomberg LP; and ‘Reader’s Digest’ was given an editorial overhaul as it slashed circulation.

The circulations of ‘Time’ and ‘Newsweek’ now stand about where they were in 1966, according to the Audit Bureau of Circulations.

“Those magazines had much more stature in those days,” said Edward Kosner, who began at ‘Newsweek’ in 1963 and was its editor in the late 1970s. “It was really important what was on the cover of ‘Newsweek’ and what was on the cover of ‘Time’ because it was what passed for the national press. They helped set the agenda; they helped make reputations.”

“The era of mass is over, in some respect,” said Charles Whitaker, research chairman in magazine journalism at the Northwestern University school of journalism. “The newsweeklies, for so long, have tried to be all things to all people, and that’s just not going to cut it in this highly niche, politically polarised, media-stratified environment that we live in today.”

Jon Meacham, ‘Newsweek’s’ editor since 2006, said the announcement was not a surprise. “In the sense that we are all in an existential crisis, it is not what I would call a stunning decision,” he said. “You would have to have been hopelessly ‘Pollyanna’-ish not to have suspected that there were fundamental shifts ahead.”

But, he said, “I decline to accept that ‘Newsweek’ in some form does not have a role to play going forward.”

Potential bidders were unclear. Bloomberg LP was not exploring a purchase, said a spokeswoman, Judith Czelusniak. Meacham said that he was considering putting together investors to buy the magazine, and that he had received voicemail messages from two billionaires after the sale was announced.

‘Newsweek’ had operating losses of $28.1 million in 2009, 82.5 per cent higher than the previous year’s loss of $15.4 million. Its revenue declined 27.2 per cent, to $165.5 million in 2009, from $227.4 million in 2008, hurt by diminished advertising and subscription revenue.

Started in 1933, ‘Newsweek’ was acquired by ‘The Washington Post’ in 1961 after Benjamin C Bradlee, then a ‘Newsweek’ editor and later executive editor of ‘The Post’, pitched the ‘Post’ president Philip L Graham on it.

Balance in politics

‘Newsweek’ under ‘The Post’ became a political counterweight to the Republicanism of ‘Time’ under Henry Luce. While ‘Time’ took a conservative stance on the Vietnam War and American culture, ‘Newsweek’ ran more youth oriented covers on the war, civil rights and pop culture stars like the Beatles (though “musically they are a near disaster”, the magazine said.)

Slowly, though, cable news programmes grew in number and popularity, and the instant news of the internet rendered weekly summaries stale almost by definition. And the notion of a cultural common ground that Americans could all share was changing.
‘Newsweek’s’ circulation was 3.14 million in the first half of 2000. By the second half of 2009, that dropped to 1.97 million. ‘Time’s’ circulation declined from 4.07 million to 3.33 million in the same period. ‘US News & World Report’, the also-ran newsweekly, abandoned its weekly publication schedule in 2008 to become monthly.

Both ‘Time’ and ‘Newsweek’ were aggressively redesigned. ‘Time’, in 2007, changed its publication date from Monday to Friday and added more analysis. ‘Newsweek’, in 2009, more or less ceased original reporting about the week’s events, and instead ran essays from columnists like Fareed Zakaria and opinionated analyses.

Whitaker of Northwestern said that, editorially, the magazines’ reinventions had not worked well. “I don’t think ‘Time’ and ‘Newsweek’, in this transformation, had enough of a distinct voice to capture the fancy of anyone in this incredibly polarised political environment,” he said.

Richard Stengel, the managing editor of ‘Time’, took issue with Whitaker’s characterisation. “Our audience is bigger than the cable audiences,” he said. “What we have embraced is point-of-view journalism.”

Stengel said that ‘Time’ was “very profitable last year, and we will be even more profitable this year”.

Both magazines increased their prices: ‘Newsweek’ now sells for $5.95 on the newsstand, and ‘Time’ for $4.95. However, subscribers pay only about 50 cents a copy for either magazine.

Both also lowered the circulation guaranteed to advertisers: ‘Time’ guarantees a 3.25 million circulation, and ‘Newsweek’ just 1.5 million.

In 2009, as the advertising slump hit magazines, ‘Newsweek’s’ ad pages fell 25.9 per cent, about average for the industry, while ‘Time’s’ fared better, dropping 17.4 per cent.
“The big factor is just the eroding advertising base — the loss of automotive, financial, technology advertising,” said George Janson, managing partner for the media-buying unit GroupM Print. “It’s not going to go back to where it was anytime soon.” And, he said, many advertisers prefer to run ads in niche publications, not broad ones.

“There are increasing challenges to being a single magazine company, particularly one that is targeted toward a general-interest area,” said Jonathan A Knee, who oversaw the sale of Businessweek as senior managing director at Evercore Partners.

But Meacham said that national coherence was still a worthwhile goal. “I would argue the fragmentation in media makes a place like ‘Newsweek’ even more important,” Meacham said. “There are not that many common denominators left.”