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
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