The Daily Beast might be on track to be profitable this year, but the Newsweek part of the NewsBeast combo isn’t looking as good: Newsweek is estimated to have lost $20 million this year. So getting the combined Newsbeast into profitability by 2013, which owner Barry Diller says is possible, will be a “daunting” task, says Adweek’s Lucia Moses.
Newsweek is using some non-confidence-inspiring tactics in an effort to shore up readership: providing what are known as post-expiration copies, or grace copies, for example. That means that the magazine has been sending issues to people whose subscriptions have lapsed, a tactic magazines use when they’re having trouble reaching their promised circulation. But in a June report, nearly 5 percent of Newsweek’s subscriptions were grace copies, a number media buyers say is far too high. Meanwhile, print circulation is down despite the cost of those subscriptions being deeply discounted.
Traffic online is down, too. In short, it’s not looking good for NewsBeast. But if the company can’t increase revenue, it’s going to have to cut costs. Moses estimates that saving the money Tina Brown needs will require cutting half the staff. Yikes.