Newsweek Taking Steps Closer to Online-Only
IAC's Diller in Q2 Earnings Call: 'The transition to online will take place.'
During IAC’s second quarter earnings call today, chairman Barry Diller provided some feedback on the future of Newsweek as a print magazine. While the print version’s survivability has been endlessly speculated on, Diller took an opportunity in the call to put the issue in better, if not entirely clear, focus.
In answering a question from an analyst on the outlook for Newsweek/The Daily Beast and whether there were plans to make it a "lighter asset," Diller noted that the brand is doing better overall. "The brand is now much better and stronger than when we acquired it," he said. "There has been a true improvement in the book and Tina Brown and her staff have done a superb job."
However, the recent decision by the Harman family to stop investing in Newsweek has shifted the majority stake onto IAC, as well as more of the burden of managing what is still a money-losing operation. "The consolidation does put it squarely on our heads," said Diller who added that investments from IAC will also be scaling back. "Our investment next year will be considerably less than it is this year."
And while Diller said the brand is stronger, its print operation is still a wrench in the gears. "So what is the problem? The problem is in manufacturing and producing a weekly news magazine and that has to be solved. Advertising in this category is entirely elective. The transition to online from hard print will take place. We’re examining all of our options."
From there, Diller tapered off on providing any specifics on when and how the transition might happen, but noted that things will begin to look "different" starting next year.
For the first half, ad pages were up about 8 percent for the magazine, per PIB numbers, and as of the December 2011 ABC publisher’s statement, single copy sales were up about 3 percent for the six-month period.
Update: Jim Romenesko has a staff memo from Tina Brown that douses some of the more aggressive reporting that Newsweek is going online only. She says: "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. He made the uncontroversial, industry-wide observation that print is moving in the direction of digital."