Newsweek Magazine has been losing money since 2007. Last year the magazine's ad sales plummeted 30 percent to $241 million, the magazine division posting an operating loss of $29.3 million. The Washington Post Company's attempt to relaunch the magazine with a higher-end, more niche appeal just didn't work, and now it's going on the block. The Washington Post Co. announced today that it's retained Allen & Co to explore a sale of the magazine, which was founded in 1933 and the company bought in 1961.
Donald Graham, chairman of the Post Company was quoted in a statement today: "The losses at Newsweek in 2007-2009 are a matter of record. 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."
Newsweek has struggled behind the main rival news weekly - Time Warner's Time Magazine. Its closure is hardly a surprise as dozens of magazines have been shuttered - Conde Nast closing big names including Gourmet and Portfolio. And Business Week, which was also struggling with the weak ad market, was bought by Bloomberg from McGraw Hill.
This news is confirmation that the attempt to relaunch Newsweek in the vein of the Economist, Atlantic or New Yorker simply didn't work. The one thing that is considered a success of the magazine's re-jiggering last May is the expansion of the opinion section. People get news every second of every day online - it's a constant stream rather than an edited digest. Newsweek was wise to move away from straight news to the added-value of opinion pieces. And still, it didn't move far enough.
Is there a future for weekly news magazines?
Who might buy Newsweek? And what's it worth? What will happen now? A private equity fund could buy the magazine for the name and its million or so affluent consumers. Another popular idea being bandied about online: the Washington Post could keep Newsweek, but combine it with its online magazine Slate, to create a single online news organization. This would cut overhead costs while retaining the value of the Newsweek name.
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