Newsweek Case Study
The Web has become a staunch champion of free information but it has also served to seemingly devalue knowledge. So whatever happened to quality? Print media is awash with exhilarating examples of investigative reporting and pulse-quickening design. The Web is catching up on substance and style but much of Its heft is unverifiable balderdash. Why then, have readers switched camps so decisively? Instead of being read by paying subscribers, newspapers and magazines are being dumped free in hotel rooms in the hope someone will pick them up.
It is a futile exercise, and an accelerating worldwide trend. This Idle “bulk” distribution – a large segment on any circulation audit statement – Is a telling statistic In the march of print to the precipice. “In examining the decline of print, the issue is not one of quality. It is of accessibility and changed lifestyle. Bankers read.
Their children click, tweet, and throw sheep on Faceable. If you want a good read, you buy a magazine, or a newspaper. If you want Information, you go online. This Is the new watershed, the divide between old and new media.
The former once attracted readers – a dwindling species as time becomes ever more scarce and online access ever more cheaply and universally available – and the latter appeals to information seekers who cherry-pick data. This renewed focus on Information offers some hope for niche how-to publications that, by satisfying this need, are not Just surviving, but thriving.
People surf the web primarily to find an answer to a question, usually in the form of a query entered into a search engine like Google or Being. They do not use the humble mouse to scroll through Gone With The Wind.
They look for recipes, today’s weather, and cricket results. Questions demand Immediate answers and the Internet Is best positioned to respond. ” CASE STUDY: NEWSWEEK CLOSES ITS PRINT OPERATIONS IN THE USA- ANALYSIS Newsweek was an American weekly news magazine Tanat was peduncles In New York City in print form from 1933 to 2012.
Its print edition was distributed throughout the United States and internationally. It was the second-largest news weekly magazine in the U. S. , having trailed Time in circulation and advertising revenue for most of its existence.
It was published in four English language editions and 12 global editions written in the language of the circulation region.
Between 2008 and 2012, Newsweek underwent internal and external contractions designed to shift the magazine’s focus and audience while improving its finances. Instead, losses accelerated: revenue dropped 38 percent from 2007 to 2009. The revenue declines prompted an August 2010 sale by owner The Washington Post Company to 92-year-old audio pioneer Sidney Herman?for a purchase price of $1. 0 and an assumption of the magazine’s liabilities, to the tune of approximately $47 millions. In November 2010, Newsweek merged with the news and opinion website The Daily Beast, forming the Newsweek Daily Beast Company, after negotiations between the owners of the two publications.
Tina Brown, The Daily Beast’s editor-in-chief served as the editor of both publications. Newsweek was Jointly owned by the estate of the late Herman and the diversified American Internet Company. IAC. On October 18, 2012, Brown announced that Newsweek would cease print publication – at least in the U.
– with the December 31, 2012, issue and transition to an all-digital format, to be called Newsweek Global. On April 29, 2013, IAC/eliminative Corporation Chairman and Founder Barry Dilled stated at the Milkmen Global Conference that he “wished he hadn’t bought” Newsweek because his company had lost money on the magazine and called the purchase a “mistake” and a “fool’s errand. ” In 2003, worldwide circulation was more than 4 million, including 2. 7 million in the U. S; by 2010 it was down to 1. Million (with newsstand sales declining to Just over 40 thousand copies per week).
Newsweek publishes editions in Japanese, Korean, Polish, Spanish, Revelations Spanish, Arabic, and Turkish, as well as an English language Newsweek International. During 2008-2009, Newsweek undertook a dramatic business restructuring. Citing difficulties in competing with online news sources to provide unique news in a weekly publication, the magazine refocused its content on opinion and commentary beginning with its May 24, 2009 issue. It shrank its subscriber rate base, from 3. 1 million to 2. 6 million in early 2008, to 1.
Million in July 2009 and then to 1. 5 million in January 2010?a decline of 50% in one year.
Mecca described his strategy as “counterintuitive” as it involved discouraging renewals and nearly doubling subscription prices as it sought a more affluent subscriber base for its advertisers. During this period, the magazine also laid off staff. While advertising revenues were down almost 50% compared to the prior year, expenses were also diminished in a planned strategy that the publishers hoped would return Newsweek to profitability. The financial results for 2009 as reported by The Washington Post Company showed Nat perseverant revenue Tort Newsweek was clown In U Ana ten magazine division reported an operating loss for 2009 of $29.
Million compared to a loss of $16 million in 2008. During the first quarter of 2010, the magazine lost nearly $1 1 million. On July 25, 2012, the company operating the Newsweek indicated the publication is likely to go digital to cover its losses and could undergo other changes by next year. Barry Dilled, chairman and chief executive at the conglomerate IAC/oleomargarine’s, said his firm is looking at options now that its partner in the Newsweek/Daily Beast operation has pulled out.
On October 18, 2012, the company announced that the print edition would be discontinued at the end of 2012 after 80 years of publication.
The online edition is named “Newsweek Global”. The magazine is still available in hardcopy in the U. K. And Europe. Having taken this content from Wisped, the question that begs to be asked is this: Was the advent of digital the reason that Newsweek ceased operations, or was it it’s own loss making machinery that eventually led to it? Another article on the web states thus: Critics and skeptics will cite Newsweek demise to support their claims that print journalism is dying.
Far from it.
Despite the increase of interesting news and views on the tube and Web, major national, regional and local newspapers are doing K. “Brown is a fine turnaround specialist, but she reached Newsweek too late. Its downward spiral began in the sass. When the Internet cost it advertising, owners responded by cutting quality. ” ? Philip Meyer, author of “Paper Route” “Right. Despite the myth, few print newspapers have folded.
Same with newsweeklies. Time, The Economist, and The Week are thriving.
It’s competitive, though, and Newsweek could not keep pace. ” Rick Edmonds, media analyst, Pointer Institute The world Brown found herself in then was one in which, for example, a viral video of the son of two lesbians could change the story of America’s advancement of civil rights, in an election year in which gay marriage issues were on the ballot, as effectively any high profile “Yep, I’m Gay” celebrity magazine cover ever could. Put another way, all of our “likes” and re-tweets set the country’s agenda more than a powerful editor’s feature selection could.
The demagnification of these key moments, the fact they no longer belong exclusively or especially to the people who can sell Gaines by posing for their covers, may be the difference between Tina Brown’s era and our own.
The above statement brings forth the importance of how much the world has changed! While earlier we were entirely dependent on these publications to bring the news to us, on a periodic basis, and our roles were limited to that of a consumer, this is no longer the case anymore. Consumers of today are contributors as well as producers of content.
This is evident in the fact that we are empowered by the social media, to say the least. We can like, tweet, share, comment, discuss, argue, run petitions, Ana so much more wit n ten Internet. E get access to news In real time, from almost every corner of the world, a feat unimaginable, perhaps, a mere 25-30 years ago.
An article in the New York Times has excerpts as below: Ms. Brown characterized the move as bowing to the inevitable digital future. Muff cannot actually change an era of enormous disruptive innovation,” she said in a phone interview. “No one single person can reverse that trend.
You chant turn back what is an inexorable trend.
” But behind the scenes, current and former employees say, there were tensions that led to an increasingly tumultuous newsroom, as financial losses mounted and Ms. Brown struggled to integrate the two operations and maintain Newsweek relevance. Despite her best efforts to take a flagging product and rejuvenate it, much of what she tried fell flat, and her attempts to create buzz with cover articles that discussed sex addiction and called President Obama “the first gay president” resulted mostly in puzzlement and, sometimes, ridicule. Ms.
Brown would tear up long-planned issues at the last moment, according to a staff member involved in production, who declined to speak on the record because of the impending layoffs.
That left the art department scrambling to come up with meeting to illustrate her next big idea. Magazine industry experts say it is not fair to blame Ms. Brown for all of Newsweek problems. She fought a losing battle for a magazine whose circulation peaked in 1991 at 3. 3 million but was down to 1. 5 million in June.
While advertising pages and revenue grew modestly, it brought in a fraction of the money earned by rivals like Time.
Also, Newsweek has not had the resources that benefit magazines like Time, which is part of a huge magazine empire that can withstand losses. “Newsweek has had two highly talented editors ? Tina Brown and, fore her, Jon Mecca ? and it illustrates that it is not an editorial problem,” said Feared Karri, a former editor of Newsweek International. “It is a larger business problem. ” Many other magazines are likely to suffer Newsweek fate. Reed Phillips, managing partner of Deskill & Phillips, a media-banking firm, said he was advising more publications to cut their print operations.
We’re finding publishers with three or four years of losses in a row. We’re telling them, ‘Stop losing money,” Mr.. Phillips said. “Make your cost structure what you’re bringing in revenues or Just abandon the print. ” Ms.
Brown said the company did not shut down Newsweek entirely because it has an “enormously strong” brand. It still has foreign print licenses in Japan, Mexico, Pakistan, Poland and South Korea, and is negotiating two new licenses in Asia. The decision to end the print edition “was always going to happen,” Ms. Brown said. “It really has not been a question of if,” she said. It was a question of when.
” This article leads to the primary question – Is digital advent really the reason for Newsweek ending it’s print run in the US, or are the reasons for that more administrative and regarding to financial stability in nature? Even though Tina Brown got her share of blame, she also got her fair share of support. She herself had claimed that when she took up Newsweek, it was moribund in nature. Obviously, traditional ways in which Newsweek was being run wasn’t working, and a drastic make over was required. And that she did.
Below we find another article that speaks about the major profitability crisis the publication was facing.
An article that featured on mans Money brings forth the following stats: I en Bob-year-olla padlocking generated S down more than 68% from $445 million in 2003, according to data from the Association of Magazine Media. Dilled, who is a billionaire, clearly could afford to fund the publication as it tried to regain its financial footing as a digital business. His patience, though, wasn’t endless. On the other hand, Time magazine, owned by Time Warner, slumped 30. % to $419 million during that same time.
Sports Illustrated was down 9% to $576 million, and Entertainment Weekly has plunged more than 15% to $197 million. Time Warner also owns both publications. Time, the largest magazine publisher, has long been a drag on the world’s largest media company. Operating income plunged 43% to $97 million n the last quarter as advertising and subscription revenues slumped by double digits. Time Warner has been under pressure from shareholders to Jettison Time Inc. As it did Time Warner Music a few years ago.
It wouldn’t be surprising if CEO Jeffrey Bosses was considering converting some, if not all, of Time’s publications to all- digital formats in the not-too-distant future. Time has reportedly hired McKinney & Co. To “identify new ways to mine revenue from consumers,” according to Ad Week. Taking the above statistics into consideration, maybe it’s safe to start towing the line which says that the advent of digital wasn’t the only reason for it’s closure, though it definitely seems to playing a major role in bringing colossal publications down to their knees.
Bringing Balance to Your Print and Digital Media (www. Inc.
Com) Mobile, social media, interactive, video?there’s no doubt that digital technologies get the lion’s share of buzz in the marketing world today. But here’s an interesting factoid revealed in Fed Office’s Fourth Annual Signs of the Times Small Business Survey (Spring 2011): While many small business owners plan to reach existing and potential customers online ND through social media, more than half (53 percent) intend to use more-traditional channels such as newsletters and direct mail.
What is the right mix of digital and print media for small and medium-sized businesses? Obviously, there’s no single right answer that covers all types of businesses in all kinds of industries, but there are strategies you can use to figure out what’s likely to work best for your company. “Finding the right mix of print and digital is less about your business and more about your customers,” says Jollily “Joey’ Sergeant, a principal in consulting firm Brontosaurus. “Think about who they are, how they buy, where they go. Understanding those things will help you determine how to reach customers with a mix of print and digital that provides the greatest visibility in the right places.
Look for the ability to create multiple impressions in a variety of venues to get the best ROI from your marketing programs, Sergeant suggests. Avoid wasting money on marketing programs that won’t reach your target customers by first doing research to ensure that any opportunity you are considering will actually help you connect, online or off.
Determining value Beyond having a solid understanding of your customer and your marketing objectives, budget and timing will quickly narrow things down to determine the best options for reach, frequency, and impact, says Robin Block, marketing strategist at Blackest Marketing. The type of business and/or product is important because leveraging existing communications channels can be a key part of a marketing strategy. “The opportunity cost?the value of the other thing you could be doing?is a critical part of the trade-off decision” when choosing between media alternatives, she says.
No matter what the mix, all types of media should be used together in a complementary manner in what’s come to be known as integrated marketing, says Kevin Kelly, chief creative operative at Buzz Marketing Group. “Digital and traditional media should be treated the same. It all comes down to reach, frequency, and engagement,” he says. “If digital and interactive aren’t part of your traditional plan by now, you should fold up your tent and go home. ” So, as we see in this article, even though digital is advancing but some 53% people would still prefer to use the traditional channels (at least in 2012).
The challenge here becomes not only identifying the 53%, but also catering to them as regards the content and periodicity, at a risk of losing the other 47%. There can be no magic formula that would work in case of all scenarios, but if a publication wishes to keep running its print side of business, it has to ensure that it remains as profitable as ever. And for this, it has to change at the unprecedented speed that digital is evolving else perish. Having said that, it can be imagined how extremely difficult it would be to run a print publication in an environment which has become reprovingly dynamic, interactive and fast.
Hence, on the one hand, a publication needs to incorporate the various dynamics associated with the consumers of today, but on the other hand, these prove to be extremely difficult to inculcate in the print media, and very easy in digital.
With digital having such advantages over print, it is hard to imagine a sustainable run for print. What happened with Newsweek was in all rational a combined effort of rising costs, dwindling readership, the advantages of going digital, and to some extent, even failing quality.
Newsweek must have found it official to carry on, especially with cumulative losses of over 47 million dollars, and more being added with each quarter. As mentioned in one of the articles, Newsweek could not shut shop because it’s presence in the other countries, such as Japan, I-J, etc. , was still doing well. Hence, instead of going away, they went digital, in a Joint venture with The Daily Beast, to have a last attempt at rebuilding itself on a different platform.
However, even this was considered a mistake (“fool’s errand”) by the boss at the latter, Dilled, who claimed he was “seduced” into buying Newsweek.
To conclude, t would be safe to say that Newsweek print operations died in the US because of mounting losses, and dwindling subscribers, and the only reason it is still kept running Is Tort ten sake AT I RSI Intermediaries elsewhere In ten world. Dealt may nave played a part in its demise, but as stated in another article above, magazines like the Economist and The Week are still “thriving”. However, I have some reservations with regards to the word “thriving” as The Economist has a strong presence, as well as subscription base online, as well on print.
This is major because of the quality it presents to the customer.
Hence, instead of blaming Newsweek, we should consider the fact that they lost the plot and failed to perform. On print, and on the digital platform too. The secret of survival in the information world is not size. It is speed. Let us try and see whether digital really is killing print media? The underlying message across all the articles and content Vive read so far has one thing in common. The decline is overstated; the news organizations are going through a process of transition and adaptation.
The fact that the newspapers are in perpetual decline is a western centric (mature markets) phenomenon. It does not sake into account the regional variations and the fact that in many emerging economies, print newspapers are robust and growing. The functions of media are as follows: Keeps people informed. Facilitates people to engage in lively debate. It is a critical part of a functioning democracy Let us look at the data from the following countries, and their percentage circulation change from 2010 to 2011: Country Circulation change US Greece Italy Canada Africa Asia S.
America -25% -20% -18% -17% +30% +4. 55% The common aspect to all the countries is the speed at which the industry is changing; hence, the common challenge is trying to keep up. We have 2 simultaneous crises on hand: 1 . Decline in circulation for mature markets, and hence the advertising revenue, and 2. The rise of widely available and free online news content.
Consumer behavior has started to change rapidly with the advent of the Internet. Instead of getting one paper in the morning, people get multiple updates across the day. Majority of the available online content is free, and from multiple sources.
Change in consumer behavior has resulted in advertising moving from print to the online platform, Ana at a Traction AT ten cost. Consider the “10 percent problem”, for the New York Times (NOT): The print reach is 10% of the online reach, whereas the online advertising revenue is 10% of the print advertising revenue. Hence, there is an almost perfect inverse relationship, and this trend can stand true for almost all major publications.
Consequences of the advent of digital media: Job losses: The cost of keeping the older and more experienced Journalists is relatively rising, and hence they have become more easily dispensable.
There has been a marked decline in the Journalistic quality. News organizations are now turning to more competitive and qualitative approaches, such as palpably launching, ND further ownership consolidation (where the big players buy and acquire the smaller players) Also note, even after putting your online content behind a palpably, there is no guarantee that your audience will follow, and that desirable revenue will be generated. Here, we make an obvious observation that it would take a niche marker to value a rare and specialized product in order to allow of paid-for content.
For example, Wall Street Journal (WAS), Financial Times (FT), The Economist, etc.
Produce in-depth analysis, feature reports, commentary by experts, and public intellectuals, that the consumers can acquire after paying for. Also, a decrease in circulation would lead too decrease in advertising revenue. Revenue Alternatives: Companies in emerging markets should already seek to decrease their strong dependence on print. This can be achieved in the following ways: 1. Diversifying business strategies 2.
Moving beyond news aggregation and distribution 3.
Utilization of brand name The Brand Effect: The idea behind this concept is simple. Newspapers develop significant brand loyalty from their readers, and often come to be associated with certain attributes. Reliability is one of the primary attributes. This can be used for: (I) Brand Extension, ND (it) Customer Identification The business model of a newspaper begins with assembly of information, followed by placing it in context and ending with providing readers with an in-depth analysis.
Now, the idea behind brand extension is similar to “product-line extension”.
Product- line extension is the appearance of another product that a company introduces within the same market after it’s existing product. Major products AT a newspaper are primarily: news Ana International Brand value is an expression of trustworthiness readers feel towards the newspaper and/or the experience of customers regarding the quality of its information. Information can continue to be the main product, but it can be presented and offered in different ways to attract new customers and make the existing ones pay, or spend even more for the brand they’re accustomed to.
For example, the brand can be used for other product labels, such as books with educational content. Newspapers can offer their expertise in book reviews, food sections, etc.
, and participate in creating revenue streams for book publishers, restaurants, etc. The second general approach of newspaper companies can be indirect: Companies can organize seminars, conventions, debates and workshops. Y making use of their human capital and Journalistic experience to sell information and train individuals. For example, in Greece, Inappropriate has a 35% stake in a company that organizes medical conferences.
In Brazil, Reed Gazette promotes educational events and seminars debating political issues, and so on. Organizations can also try and use the brand loyalty to sell merchandise.
Example, NOT has an entire web store, and German newspapers sell watches, etc. However, there is no silver bullet to make up for the steep losses in advertising revenue. The newspapers can also use and acquire assets other than the brand: 1. Acquire and/or create new assets, including websites, TV stations or radio stations. 2. Use extending assets more Judicially and efficiently.
There are 3 general models for monitoring online content 1.
Based on subscription 2. Based on commissions 3. Based on advertising revenue An important note in this regard is that print and TV news channels have to be regulated in terms of cross-ownership. If a merged company has a significant market share, then this kind of cross ownership can be problematic.
Online Modernization: The fragmentation of the newspaper industry and the financial issues are not cause of, but exacerbated b the rise of the Internet. In face of increased competition from online news providers and aggressors (like Yahoo news, Google, etc. That are able to publish news for free, newspapers have lost their monopoly on information dissemination. Most people are concerned about how to noontime their online product/output. Palatals: For a vast majority of the people, the price they’re willing to pay is zero.
For a few, it’s something more. The key question of any palpably is how to maximize their revenue generation from within these two extremes, and the various gradations in between. It does not become a case of whether publications charge for content, but about what they charge for, and how.
In general, there are 4 types of gradations: 1. Full payment (Example, the Times of London) 2.
Pay for premium (Example, WAS) 3. Hybrid (Example, NOT) 4. Free content (Example, The Guardian) Use of social media: In itself, it does not provide immediate opportunities for increasing revenues, bit it provides publications with ways of producing more accurate content more quickly, and of being able to increase the audience for content. Social media seems to impact publications in three areas: 1 . Content distribution and promotion 2.
Online referrals to publications’ digital content 3. Tools to allow readers’ involvement in a story through rating buttons and comment features. For example, the Guardian is investing more in distributing the Journalism, and allowing people to connect with it off their platform, via social media. Increasingly, journalists are not working alone. They’re no longer the sole creators of content for stories; instead readers are recommending information for use in stories, and promoting Journalistic content through their social network or social media like Twitter, Faceable, etc.
Readers expect to take active part in the story, to respond to it, and to contribute to it” “Engaging with readers resulted in higher quality of content, including getting your readers to look at a set of data, and send it and publish their own thoughts about what the date represents. ” Likewise, Passbooks like buttons and referrals resulted in a significant increase in traffic. Organizational change: The primary challenge for an established organization is to move from point A to point B, not knowing where point B is, which proves to be tricky and hence, moving with conviction is difficult. It is clear that as online becomes more important,