One day in, and already the new owners want to kill Newsweek.com. According to Stephen Colvin, CEO of the new Newsweek/Daily Beast company, he wants to shut down the Web site of Newsweek magazine and keep the Daily Beast as the company’s digital presence “Because the Daily Beast is a very credible and successful news and opinion Web site. And with great vitality and distinct voice.”
True. But hardly a reason to close an equally credible news and opinion Web site that has great vitality and voice (one that, I might add, does not expect to lose $10 million this year (in fact, the Newsweek.com Web site has only once in its existence even spent more than $10 million in a year, and never lost more than a couple million)). While others have done a good job detailing all the great journalism that has been done by the small staff there (and, disclosure & etc., I was part of that staff for four years, and my wife has just started working as an editor at Newsweek), I’d like to explore whether closing Newsweek.com makes sense from a business perspective.
The thinking here seems to be that: a) The company only has resources to maintain a single Web presence, b) The Daily Beast is the superior product editorially, with a better brand on the Web, so that should be the one to survive; c) That even though the company thinks the Beast is the better Web product, it has less than half the monthly unique visitors of Newsweek, and is losing money because those low pageviews can’t attract enough advertising dollars to pay the bills so d) the solution is to kill off Newsweek.com and funnel its five million monthly people over to the Beast and, voila! You’ve got a new, stronger Daily Beast Web site with seven million unique visitors every month.
Of course, that’s not what will happen, for a couple of reasons. First, killing off Newsweek.com and redirecting the url to the Daily Beast wreaks havoc on your SEO; forget about any long tail pageviews you used to collect from the old Newsweek.com. Second, more than 50% of Newsweek.com’s traffic comes to it from MSNBC and MSN through content/linking deals; it’s unclear whether those deals would continue with the new company, but it seems less than likely; if MSN/MSNBC had wanted to do a content deal with the Daily Beast they would have done so already, and I find it unlikely that they will be happy with simply linking to a new site with a much different editorial vision.
This is not like the print magazine business, where a company can kill off one of its titles to prop up the circulation of another, as Time Inc did with Life magazine. Online, when you’re not charging for your product, you don’t have customers, you have audience. My guess is that if the Daily Beast even gets 10% of Newsweek.com’s monthly uniques to come over to their place, they’ll be fortunate.
Then of course, there’s the damage that you’ve already done to your existing business. Just by saying that Newsweek.com’s Website is going to close, you’ve made it very hard to sell any more advertising there; what advertiser wants to buy space on a doomed platform? (Ad Age has more on this line of thinking).
According to the sale documents, Newsweek.com last year spent $11 million and earned around $9 million. Under this plan, the company is sacrificing 90% of its online audience from one publication in order to send 10% of those people a smaller publication that lost considerably more money. Does this make sense? Why would it not be smarter to maintain both sites, and try to make money off a combined audience of 7 million for two properties, especially since Newsweek.com has shown it can command a far larger audience while losing far less money?
I also respectfully suggest that Colvin hasn’t thought this through. Some issues:
- Is there to be no online presence for Newsweek the print brand? If so, say hello to your accelerating death spiral; the average age of a print Newsweek reader is in the mid-50s now; killing off its Web site isn’t going to help move that number in any direction but the wrong one.
- If the answer is that Newsweek still needs some sort of online presence, how does that happen? As a subsection of the Daily Beast? As a completely walled-off, paywall protected garden? If that’s true, as Clay Shirky has observed about the Times of London's similar experiment, you’re now in the newsletter business, rather than the mass commercial magazine business; are you prepared for that?
- What about ad sales in print? Typically many of these now come with an online component attached as part of the buy; will advertisers really want to buy Newsweek in print and the Daily Beast online?
- What about subscriptions? Can you sell visitors to the Daily Beast on subscriptions to the print magazine as effectively as Newsweek’s current Website can? Why would someone reading something called the Daily Beast Online be moved to subscribe to Newsweek in print?
Again, I have an emotional stake here; I respect and admire the staff of Newsweek.com, just as I respect and admire the staffers of the Daily Beast. I very much want the combined Daily Beast/Newsweek to succeed. I just think they’ll have a better chance if they don’t limit their chances to do so.
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