When the Washington Post Co. put Newsweek on the block, pundits were quick to declare the end of the mass weekly magazine.
They had a point: The three big newsweeklies are down to two, and they’re smaller versions of themselves. Meanwhile, consumers now graze from a buffet of news Web sites, cable channels and smaller weekly titles like The Economist and The Week that have eroded the newsweeklies’ place as agenda setters.
Advertisers have taken note. Over the past 10 years, Time and Newsweek have shed more than half of their ad pages, which has forced them to whittle down circulation to smaller, more profitable levels. With 76-year-old Newsweek’s ad pages down 26 percent last year, its sale prospects seem as skimpy as its issues have been lately.
“The world has changed in terms of how mass things need to be,” said Carolyn Dubi, svp, director of print at Initiative.
The bigger of the two survivors (a third, U.S. News & World Report, went monthly in 2009), Time says its situation is much different. Executives there say the magazine is generating profits, thanks to a series of pre-recession moves. Time slashed its rate base by 19 percent in 2007, to 3.25 million (Newsweek followed suit a year later, going to 2.6 million from 3.1 million and then to 1.9 million in 2009).
Time redesigned its print edition with more emphasis on analysis while focusing on breaking news online, and moved its delivery date to Friday from Monday to have a stronger impact on the Sunday talk shows. Time has major editorial initiatives like Person of the Year and Time 100, which it’s expanded to other platforms, such as ad-sponsored roundtable events and iPad content.
Time’s print ad-page declines have stabilized this year after a punishing ’09, and Rick Stengel, Time’s managing editor, said the magazine is “solidly profitable.”
“What we did was we fixed the roof while the sun was shining,” he said. “It’s put us in such a strong and healthy position now.”
Time also has built out its 86-year-old brand digitally, to the point where 10 percent of revenue comes from digital sources. While Time Inc. was derided for its failed Pathfinder portal of the ’90s, its flagship has been making smart moves online lately, hiring wunderkind Josh Tyrangiel (who recently left to become editor of Bloomberg Businessweek) as Web editor and last week launching a news aggregation site. Today, Time.com reaches nearly 5.5 million monthly uniques. Meanwhile, the magazine looked prescient by being one of the first news brands to launch on the Apple iPad on April 30.
“I think they’ve done the best job in making themselves a multimedia property,” said Peter Gardiner, partner, chief media officer, Deutsch. “They’ve worked smartly at making themselves more than a print magazine. It happens to be the last man standing that’s been the most progressive and aggressive.”
Yet questions persist about the future of the newsweekly magazine format. Time and Newsweek still boast large, upscale print audiences that make them attractive to a range of advertisers. Time for one, has an audience of 20.6 million, barely unchanged versus three years ago. Its readers have a median age of 47 and household income of $74,000, per MRI, demos many publishers would want to have.
“Those revised rate bases are still relatively significant when we’re looking for quick reach and an affluent audience,” said Eric van den Heuvel, director of media solutions at agency The Gate Worldwide.
Time execs insist there’s still demand for a general interest news vehicle. “We decided, Time was a mass brand,” said Andy Blau, svp, and group general manager of Time Inc.’s News & Sports Group. “We weren’t going to try to recast it as a niche brand.”
Yet as ad measurement gets more sophisticated, advertisers will shift spending to more efficient media, to the detriment of mass audience weeklies, whose utility already is in question, said Barry Lowenthal, president of the Media Kitchen. “Time and Newsweek for years stood for, ‘This is what’s going on in the world now,’” he said. “I don’t need Time and Newsweek to tell me what’s going on in the news now.”
The imperative for Time today is to convert its growing digital audience into dollars to offset declining ad and circ revenue. Since years of discounting has eroded the weeklies’ subscription revenue to about 50 cents a copy (one fourth of what 813,240-circulation Economist subscribers pay), print ad revenue continues to provide the lion’s share of money. Selling downloads on the iPad, where Time is charging the same as a newsstand copy ($4.99), offers a chance to recoup sub dollars, but it’s unlikely that side of the business will ever regain much ground. (Time wouldn’t give out download figures.)
“Time versus Newsweek, they face the same handful of problems,” said van den Heuvel. “They’re just in different stages of addressing them.”