Update 4:29 p.m. EST: Newsweek editor Tina Brown sent a note to staff, posted on the magazine's Tumblr, that also gave sober reading to Diller's plans to go all-digital. "Barry Diller would like to make it clear that he did not say on the earnings call as reported that Newsweek is going digital in September," she wrote. "He made the uncontroversial, industry-wide observation that print is moving in the direction of digital."
Update: 2:11 p.m. EST: Today's Newsweek's news is awfully big, but AllThingsD's Peter Kafka want to make clear that Barry Diller's plans, well, aren't so clear. "During IAC’s earnings call today, an analyst asked Barry Diller if he has considered an online-only version of Newsweek. Short answer: Maybe." writes Kafka.
Here's Kafka's transcript of what Diller said, and what's leading him to think that Diller might not be as committed to the end of Newsweek's print edition as other reports might have you believe:
The problem is, manufacturing and producing a weekly newsmagazine, and that has to be solved. And everybody is going to face the same problem — other than, I think, luxury brands — over a period of time. Because advertising in this category is entirely elective. And the transition will happen, I believe. I’m not saying it will happen totally. But the transition to online from hard print will take place. We’re examining all of our options. Our plan is that, by September, October and certainly, uh, firmly have a plan in place for next year.
Original: Barry Diller, the chairman of IAC/InterActiveCorp which recently acquired sole control of Newsweek, said that a plan to end its print edition might be coming as soon as next fall. His comments came in IAC's quarterly earnings call and were first reported in a two-sentence story by Bloomberg News's Sarah Frier ("Newsweek, the 79-year-old magazine, will eventually transition to an online-only publication") and then in a tweet from her colleague Edmund Lee ("Barry Diller says by September-October, plan for digital only Newsweek will be announced"). The first actual quote from Diller came later in a post by Politico's Dylan Byers: "The transition will happen. The transition to online from hard print will take place. We’re examining all of our options."
That doesn't sound like the print edition is going to end imminently, and an IAC spokesperson followed up with Byers with a statement confirming the September or October target for the announcement of a plan to transition to digital. Justine Saco wrote in her email:
[Diller] was speaking about the weekly print industry in general and said that it’s difficult. We’re looking at all options for Newsweek and will have a plan in place by September or October. He mentioned that he thinks at some point there will be a transition to online from hard print, not entirely, but a general transition, but that was in reference to the whole industry.
Ever since Diller acquired half of Newsweek in 2011, despite its tradition and with star editor Tina Brown's attention-grabbing covers, the magazine has been a financial sore spot for Diller. The recent decision by the family of Sidney Harman, who bought Newsweek from The Washington Post in 2010, to give up its stake and stop contributing to its losses would only exacerbate the financial hit. Ultimately, Diller cares about the profitability of IAC, which owns a portfolio of businesses like Match.com, Ask.com and Excite. Reuters reports, "IAC's profit was impacted by an after-tax non-cash charge of $16.2 million, or 18 cents a share, from a write-down in the value of its stake in the money-losing Newsweek Daily Beast after it bought a controlling interest in the business." Overall the company reported net income was up 2.1 percent to $43.3 million and revenue climbed 40 percent to $680.6 million. "Newsweek is not necessarily a distraction for IAC management, though investors may get perturbed about it not being profitable and weighing on the company's bottom line," a financial analyst told Reuters.
Most magazine publishers these days concede that their publications will ultimately have to transition to digital-only at some point. But with major revenues still generated by print advertising and circulation, the question of when is usually unsettled. And a plan for a digital Newsweek could mean scaling back from its weekly schedule without abandoning print entirely. But in any case, the death of print, as Matt Drudge headlined the news, is not far off.
This article is from the archive of our partner The Wire.