Who's Really to Blame for the Death of Newsweek?

This year will be the last that Newsweek publishes a print magazine. With these sort of things, the reaction among journalists is always a strange mix of sorrow, schadenfreude, and giddy relief. Many people seemed to say Newsweek's demise was a moral punishment for Tina Brown's increasingly desperate covers. But Newsweek was drowning before Brown found it. To say the magazine died from sensationalism is like saying Titanic passengers died from screaming too loudly.

This is an economic story, plain and simple. The print news business is grim and hardly needs a lengthy explication. The best print-and-save metaphor comes from James Fallows' analysis of Newsweek's plight back in May of 2010.

Imagine a 747 flying between two flush and populous metropolises. Call them Newsweekly Reader City and Advertiser City, if you wish. Now imagine if both cities enter a prolonged recession, as both experience a massive exodus. Over time, you have the same huge expensive infrastructure serving two metros whose wealth and population have collapsed. What happens next? You don't exactly need McKinsey to come in and tell you: "We're gonna need a smaller plane."

How big, exactly, was Newsweek's 747? In 2010, according to Ryan Chittum, Newsweek spent $222 million a year, including $42 million on more than 300 employees (one-third journalists). The biggest expense by far was putting out a print magazine. Subscription services, circulation, and production of the physical magazine came to $102 million. But print was also the source of more than 90 percent of revenue. Overall, the magazine lost almost $30 million.

This isn't Newsweek's plight. It's print's plight. Newsweek just feels the sting more acutely because it prints 40+ times a year as opposed to 10 times a year. Attention is fleeing paper publications even faster than advertising is abandoning them. If you want to know why Newsweek won't be the last major print magazine to shut down print operations in the next few years, this is the graph to remember:

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There are two more issues to resolve:

(1) What happens to Newsweek? There are no good answers to this question, but I'm afraid Tina Brown might have picked one of the worst. Rather than fold the print magazine and take the whole thing online for free, she's creating a separate *paid, subscriber-only* product for the tablet. This is an answer to the wrong question: How do I publish Newsweek without actually publishing Newsweek? The right question is: How do I continue to attract great people to do great work in this media company?

Great journalists -- the kind The Daily Beast needs to thrive -- want to be read by the widest possible audience. Two months ago, Tina Brown could tell a prospective writer, "Your work will be seen by hundreds of thousands of magazine subscribers plus our 15 million online readers." Two months from now, that pitch becomes, "You can write for our huge website audience *or* a smaller tablet audience where your content will be behind a paywall." I don't know why a writer would choose to spend extra time reporting a piece for a considerably smaller tablet-only audience.

(2) What happens to print? There are sugar dads and moms out there who are willing to eat million-dollar losses for the romance of print, but the magazines that find and maintain profitability will almost certainly be those who transition to the Web and use a slimmer print publication as a brand anchor (Hey look! I'm on a newsstand! I'm a new cover story! Pay attention to me!) and a megaphone (our cover stories -- like Newsweek's, I'm sure -- do massive traffic online precisely they are events that are still unique to print). In short, most print publications will either have to learn to fly a smaller plane or hope somebody is willing to subsidize their 747.