Earlier this fall, IAC sold its interest in Newsweek to International Business Times Media (IBTM), a "digital global news publication". After acquiring Newsweek, the new owners hired Jim Impoco to edit the magazine. The move prompted swift commentary from acerbic industry observer Michael Wolff, who used his column in the Guardian to call Newsweek "the poster child of magazine journalism failure".
If you're not already familiar with the title's recent history, here's a recap:
- In 2010, the Washington Post sold the publication to Sidney Harman, best known for his pioneering work in audio systems. The magazine was said to be losing $1 million a week at the time of sale.
- Shortly after, Harman merged Newsweek with IAC's Daily Beast, and Tina Brown was named editor of both.
- In April 2011, Harman passed away; his wife began managing the Harman interest.
- The losses continued, and in July 2012, the Harman family decided to stop putting in more money, in effect reducing their share of the joint venture.
- In the fall of 2012, IAC bought the remaining Harman share, then decided to stop the print edition.
- This fall, IAC sold the brand to IBTM
Earlier this month, Impoco announced that Newsweek planned to revive its print edition in the United States. Wolff's Guardian piece preceded that decision, but it's not hard to imagine how he would react to this latest turn.
At its core, Wolff's argument is not a new one: having lost its digital and print presence, Newsweek is the publishing equivalent of a startup. Starting a weekly publication costs money, probably (Wolff said certainly) more money than the folks at IBTM are willing to put into the venture. As such, there's no good ending to this story.
I've worked on a magazine launch (Entertainment Weekly, in 1990), and I can confirm that starting a weekly magazine costs money. The title lost something close to $50 million in its first year, a number that may have approached a cumulative $200 million before the magazine turned a profit several years later. No one in publishing today is likely to invest that kind of money in a print product.
In his critique, though, Wolff glosses over an often-missed fact: it's not quite a relaunch. The magazine's print edition was closed in the United States. International editions lived on, with content created by a modest group of journalists who have not stopped even as the brand was kicked hard in the U.S.
A print relaunch in the United States could work, if Impoco is able to deliver a magazine that subscribers are willing to pay for. Here's what he told the New York Times:
It’s going to be a more subscription-based model, closer to what The Economist is compared to what Time magazine is. We see it as a premium product, a boutique product.
This is an idea that stood The Economist in good stead as it has grown in the U.S. market. It's also an idea I offered to Time Inc. as it tries to find its way in the world: "Magazines should be profitable based on circulation alone."
According to Impoco, Newsweek would like to get 100,000 subscribers to buy a subscription in 2014. That's 1/15th the circulation Newsweek had before it closed, although the average price then was below $20.
Is there a market for a weekly magazine priced above $100? The Economist and People have proven yes. The question becomes what Newsweek can do to make its magazine appealing to an audience willing to pay for good journalism. I'm glad to see them try to answer that question.