It’s official, Newsweek is for sale—and not just at the newsstand, but the whole operation.
The current affairs weekly magazine has been struggling for some time, and in the past year it has tried to reduce costs through employee buyouts, and boost readership through a redesign and a new editorial focus, along with a reduction in its rate base, all to no avail.
Its ad sales were down 20% in the first quarter and 26% overall last year. Its owner of almost 50 years, The Washington Post, today announced that the ailing title no longer fits within its holdings, which also includes Kaplan tests and a cable operator.
“Despite heroic efforts on the part of Newsweek’s management and staff, we expect it to still lose money in 2010. We are exploring all options to fix that problem. Newsweek is a lively, important magazine and website, and in the current climate, it might be a better fit elsewhere,” chairman Donald Graham said in a statement published on the Newsweek.com home page.
The sale of the venerable brand is a harbinger of the generally besieged print media industry, as readers continue to jump ship to the web and mobile, and ad sales remain lethargic.
Newsweek also faces a branding dilemma: are the words “news” and “week” an anachronism in this age of always-on, streaming news on the Web?[more]
It’s been a tough year for media brands trying to hold onto their print business and figure out digital brand extensions.
In the past year, BusinessWeek was sold to Bloomberg (and recently relaunched as Bloomberg Businessweek with a lowercase ‘w’ and a new design), while a slew of other magazines folded, such as Gourmet and Cookie, or downsized in the hopes of figuring out how to make money on the Web.
A respected global media brand since it was founded in 1933 by Thomas Martyn, a former editor at rival TIME magazine, Newsweek’s original cover price was 10 cents.
Newsweek president Tom Ascheim had hoped to reverse the rising tide of losses by raising the cover price and eliminating renewal discounts, and shifting away from breaking news to issues and commentary – most often of a liberal bent.
As for color by the numbers, how-to-fail in magazine publishing 101, PaidContent dug through the Washington Post’s latest financials and discovered that Newsweek had 427 full-time employees at the end of last year, when ad revenue was down 37% due to an ad sales drop-off.
The last time Newsweek was up for sale was in 1959 when infamous Yachtsman Vincent Astor died. Astor left his 60% stake of Newsweek stock to his own charitable trust. Newsweek’s then-chairman, Malcolm Muir, tried to buy the title but the Washington Post took ownership in 1961.
As TIME noted, what its competitor needed on the eve of the 1960s was “an outsized wallet and a desire to keep on operating Newsweek in the Astor tradition.”
Seems that’s also needed now, in 2010, as another iconic media brand faces an uncertain future as the changing tides of the digital world roil its business model.
Update: Newsweek editor Jon Meacham was called by at least two billionaires today, and tells the New York Times he’s looking at putting together an investor group to save the title. Wired, meanwhile, thinks Newsweek should reinvent itself for the iPad.