Lesson from Newsweek: Embrace disruption
Last week was a study in contrasts: Obama vs. Romney. Yankees vs. Tigers. Newsweek vs. the magazine industry.
Newsweek’s announcement last Thursday that it was killing its print edition was a sobering counterbalance to the largely positive vibe about the magazine industry from speakers at the American Magazine Conference.
In case you missed it, Newsweek’s Tina Brown and Baba Shetty announced that Newsweek will transition to an all-digital format early next year. The Dec. 31 issue will be the last print edition of the 80-year-old newsweekly, which various reports say has been losing between $20 million and $40 million a year. Print circulation has dropped by more than half over the past decade to 1.5 million, and ad revenues have dropped by 70% since 2007.
The Association of Magazine Media (aka MPA), fresh off its annual AMC event for magazine industry professionals, quickly cautioned against using Newsweek’s plight as a barometer of the magazine industry.
"Newsweek is going all-digital, so it's easy to say that print is going away," MPA’s new CEO, Mary Berner, told USA Today. "[But] you can't extrapolate anything from their business choice onto a whole industry."
At the AMC event in San Francisco, Berner curiously chose to blame “others” for creating a negative perception about the magazine industry and the “imminent death” of print. That perception, she suggested, is driving the decline of print advertising.
“I am pissed that we as an industry have allowed others to hijack our story, our narrative,” Berner said. “By letting others hijack our story, the conversation about magazines has become one of doom and gloom, demise, and yes, even imminent death. … That conversation—which simply isn’t true—is affecting our business in the short-term, especially with advertisers.”
Better marketing, it seems, is all that’s needed to turn the industry’s fortunes around. From Berner’s closing remarks:
“At next year’s conference in New York, it is my firm intent to be able to stand up here and say that I’m thrilled because the magazine industry—with MPA leading the way—has firmly taken back the conversation about magazines by leading the conversation about magazine media: though marketing, PR, magazine media mix insight and research, by leading the way on magazine media measurement, and an aggressive outreach about the actual story of magazine media to all of our important constituencies.”
Unfortunately, the challenges facing publishers are much deeper than bad PR. The media industry serves as the latest case of Clayton Christensen’s “disruptive innovation” theory, which the Harvard Business School professor chronicled in The Innovator’s Dilemma. In the publishing industry, the innovator’s dilemma provides “a false choice between today's revenues and tomorrow's digital promise,” Christensen and two co-authors write in a new Niemen Report, “Mastering the art of disruptive innovation in journalism.”
This is the crux of the challenge for anymedia company with a legacy print business. The longer publishers stay the course with a print-centric model, the riskier their future becomes. Publishers don’t need to abandon print altogether, but they do need to restructure their business models and cultures to significantly decrease their financial reliance on print. They should not be lulled into complacency by short-term gains in print advertising or paid circulation.
Christensen and his co-authors argue that traditional media companies need to change the lens through which they look at their business, transitioning from “key demographics, price points, or distribution platforms” toward an approach they call “jobs to be done”:
“The basic idea is that people don't go around looking for products to buy. Instead, they take life as it comes and when they encounter a problem, they look for a solution—and at that point, they'll hire a product or service. The key insight from thinking about your business this way is that it is the job, and not the customer or the product, that should be the fundamental unit of analysis. … Understanding the world through the lens of jobs-to-be-done gives us an incredible insight into people's behavior.”
This approach, the authors conclude, requires a heavy dose of experimentation. This is a key tenet of a digital-first mindset for the publishing business.
One experiment not likely to pan out, however, is the digital-only newsweekly. The Huffington Post’s weekly iPad edition has hit some early speed bumps (proving that even upstarts can take wrong turns). And there’s little chance that Newsweek will succeed as a tablet edition. Reuters’ Felix Salmon puts the chances of Newsweek’s survival as a digital-only publication at “exactly zero” and predicts “a painful and lingering death” for the brand.
Some of Newsweek’s wounds are unique to its situation; the brand is tarnished, it does not have a public-facing website (it was previously folded into the Daily Beast) and criticisms of its editorial direction aren’t likely to disappear once the print run stops.
"Newsweek is not dying. Newsweek is committing suicide," Samir Husni, a journalism professor and director of the Magazine Innovation Center at the University of Mississippi, told USA Today.
The rest of the magazine industry, however, should not be so quick to say Newsweek’s wounds are entirely self-inflicted. The bottom line is that consumers’ reading habits are changing, and publishers need to change along with them.
“The proportion of Americans who read news on a printed page – in newspapers and magazines – continues to decline, even as online readership has offset some of these losses,” Pew Research Center notes in an overview of its biennial news consumption survey. The percentage of consumers who said they read a print magazine the day before they took the survey dropped to 18% this year from 26% in 2000.
Andreessen Horowitz co-founder Ben Horowitz, speaking at AMC, put the challenge in starker terms: “Babies born today will probably never read anything in print.”
That’s about as disruptive as it gets.