Digital Lifestyle Deletes Newsweek

In December, Newsweek will cease publishing a print edition to focus on all-digital delivery in 2013. The move was dictated by huge magazine losses. Much like the newspaper industry, which shrank from $49 billion in 2005 to $24 billion in 2011, many newsweekly magazines are losing revenues with no clue how to stanch the bleeding.

The U.S. consumer magazine sector has been able to grow its franchise in the past decade. In 2000, U.S. magazines racked up $12 billion in advertising, according to Universal McCann’s Robert Coen. That figure grew to $20 billion in 2011, according to the Publishers Information Bureau (PIB). Google alone, by contrast, generated $38 billion in revenues 2011.

NewsweekNewsweek, which will lose $22 million this year, will be shutting down its print edition by year-end, a victim of our Digital Lifestyle.

But in the scheme of internet news, with information pumped out a rate of 400 million tweets a day, driving traffic to 620 million sites and 156 million blogs, it’s a major challenge to generate revenues in online news. Except for The Wall Street Journal and The New York Times, few news media have really figured out how to make money online.

Murdoch’s Daily News app for the iPad reportedly lost $30 million last year. Newsweek will lose $22 million in 2012. I suspect that these costs are part of legacy “bricks-and-mortar” budgets, which will have to be downsized significantly to cope with the Digital Lifestyle information onslaught.