Back in January, Newsweek decided to abandon its print magazine for digital tablet editions. The digital edition launch was heralded with much fanfare in true Tina-Brown style (Newsweek’s current Editor-in-Chief after the merger with The Daily Beast), including an animated cover.But less than six months later, it seems that my predictions about poor financial sustainability are coming true, and parent company IAC is rumored to be looking for a buyer. IAC Chariman Barry Diller famously went on-record last month calling the purchase of Newsweek “a mistake.” (Which is not surprising since Newsweek’s former parent company, The Washington Post, sold it for $1 and assumptions of liabilities.)But Newsweek’s real miscalculation was in its digital transition strategy, which was dually flawed. One, Newsweek created a dynamic tablet edition and then made all the content available for free online! The company has subsequently announced plans to launch a metered model, with subscriptions priced at $2.99/month. But it’s likely too little too late, mainly because of point two.Which is: Newsweek abandoned print too quickly. At the end of last year, the print magazine had 1.5 million subscribers. That’s a lot of revenue to be abandoned in one fell swoop. The current (digital) subscriber base is 470,000. Clearly, the Newsweek audience wasn’t ready or willing to transition to a digital-only format.Instead of looking to drastically cut printing costs and save the newsroom, Tina Brown and parent company IAC would have been wiser to spend its resources on gently transitioning its audience to a paid digital model. This would mean creating a paywall or metered model first, including online access with a print subscription, and then upselling tablet editions — much like The Economist has done. Only then can a legacy publication with millions of print subscribers afford to stop printing.In addition, PR efforts should have been spent on managing audience expectations and backlash (for an example, look to TheDay.com), not on animated covers to generate traffic to a free site.But by putting the cart before the horse, Newsweek seems to have stopped itself in its own tracks.
