Newsweek, which has published a print edition weekly for 80 years, will abandon the format and go all digital after its Dec. 31 issue.
The digital edition, to be called Newsweek Global, will be available via subscription on tablet and online.
An undetermined number of staffers will be jettisoned.
Tina Brown, editor in chief of Newsweek Daily Beast, broke the news in a memo posted on The Daily Beast Web site this morning. “We are transitioning Newsweek, not saying goodbye to it,” she said.
“Regrettably, we anticipate staff reductions and the streamlining of our editorial and business operations both here in the US and internationally,” Brown added.
The Washington Post Co. — Newsweek’s previous owner — racked up losses of $40 million over the two years ending August 2010, prompting its sale that summer to 92-year old stereo equipment magnate Sidney Harman, who owned it solo for several months before merging its with Barry Diller’s Daily Beast in November.
Harman died from a quick-spreading form of leukemia several months after the merger and his family estate, headed by his widow, former Congresswoman Jane Harman, took over.
Earlier this year, the family said it was not going to invest any more money in the joint venture with Diller’s InterActiveCorp.
Diller signaled his intent to move to a digital format during an IAC earnings call in late July. Brown immediately tried to spin the news that his comments did not mean the end of print magazine, but three months later, that is exactly what has been unveiled.
While many of the ad-tracking services were reporting ad-page gains for Newsweek recently, knowledgeable industry source noted that much of the increase was due to heavily discounted ad sections that selling for less than half of a regular ad page.
Losses on the print side were still said to be in the millions of dollars.
While the size of the loss was not disclosed, Brown, in an interview with The Post, acknowledged “Our business has been increasingly affected by the challenging print environment, while Newsweek’s online and e-reader has built a rapidly growing audience through the Apple, Kindle, Zinio and Nook stores as well as on the Daily Beast.”
Brown did not disclose how many staff cuts will have to be made, but it is expected to be substantial.
“We’re evaluating all of it right now,” Brown told The Post. She said that the cost to print and distribute the print edition was $43 million a year. Some industry sources believed Newsweek was still losing at least $10 million or more a year.
Industry observers note that while foregoing print will lower production costs, it will also mean a reduction in revenue since advertisers pay substantially less for each digital reader than they do for a print reader.
Baba Shetty, who joined only weeks ago as the new CEO of Newsweek Daily Beast, said the title currently has 40,000 tablet subscribers.
“Now, with this announcement, and the push to Newsweek Global, we expect that to grow very rapidly,” Shetty said.
Brown in predicting future growth of Newsweek’s digital edition, said “we’ll be at hundreds of thousands by the end of 2013.”
She could not estimate how many tablet subscribers would be needed to break even.