Tina Brown, who took over as Newsweek’s editor after Barry Diller’s IAC/InterActiveCorp (Nasdaq: IACI) merged it with her Daily Beast website, announced the change in a blog post early Thursday morning, referencing a media “tipping point” in which she believes the Internet has become American’s dominant news source. Baba Shetty, CEO of the Newsweek Daily Beast Company, co-wrote the post.
“Currently, 39 percent of Americans say they get their news from an online source, according to a Pew Research Center study released last month,” Brown and Shetty wrote. “In our judgment, we have reached a tipping point at which we can most efficiently and effectively reach our readers in all-digital format. This was not the case just two years ago. It will increasingly be the case in the years ahead.”
The new all-digital publication will be called Newsweek Global, a paid-subscription-based magazine available on tablets, e-readers and the Web. Select content will be available on the Daily Beast website. Brown and Shetty report that the company anticipates “staff reductions and the streamlining of our editorial and business operations both here in the U.S. and internationally.”
Newsweek has been losing about $40 million per year, according to various estimates.
The New York Times’ David Carr wrote Thursday that Newsweek’s announcement was timed to precede an earnings call next week in which Diller had been expected to field questions about the magazine’s future.
As IBTimes reported this summer, Diller had been hinting at a digital transition for months. At an earnings call in late July, he suggested that the mounting legacy costs associated with Newsweek’s print version were not sustainable. “The problem is manufacturing and producing a weekly newsmagazine, and that has to be solved,” he told analysts.
Newsweek, like all print newsweeklies, has struggled to maintain its relevance in the digital era, although the magazine has managed to stay on the pop-culture radar thanks largely to Brown’s sassy editorial guidance, which has included several button-pushing covers. In August, Newsweek’s anti-Obama cover story by Niall Ferguson became one of the best-selling magazine issues of the decade, in terms of newsstand sales.
In their blog post, Brown and Shetty stressed their belief that the Newsweek brand will survive.
“We are transitioning Newsweek, not saying goodbye to it,” they wrote. “We remain committed to Newsweek and to the journalism that it represents.”
Newsweek published its first issue in February 1933. Its final print edition will hit newsstands in December 2012.