End of the Line

Newsweek is publishing its last printed issue.

Eighty years ago Newsweek pioneered the use of global wire services and produced its first issue, which cost a dime. In 1961 the Washington Post valued the company at $100 million in today’s dollars, and bought a controlling share. Two years ago they sold the company for $1 to a private investor, who merged its operations with The Daily Beast, an internet news-aggregator with some high-profile features and op-ed pieces.

The idea was to have The Daily Beast provide the headlines, while Newsweek would connect the dots and provide in-depth analysis. But it hasn’t worked out. Ad pages at the print publication have plummeted by 80%, and its subscriber base has fallen 50%, from 3 million to 1.5 million, while the online edition has been treading water.

Newsweek is a victim of the digitization of the news: computers, tablets, and smart-phones make a weekly newsmagazine redundant. We don’t need someone else to filter our newswire fees—Google and Yahoo news do that just fine, thanks. And Newsweek’s edgy covers just aren’t worth $5 a pop.

We’re seeing this all over: oldline companies are being gobbled up or hollowed out by online competitors. Whether it’s news, or retail, or finance, the principle is the same: adapt, or die. And when global news is just a click away, you better have something pretty special if you want to charge for it.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

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