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Digital

Magazines
By the Project For Excellence In Journalism
Digital

Publishers rolled out a number of initiatives designed to pry revenue from the readership. Especially intriguing, though unproven, were several competing plans for generating revenue through mobile devices (click here to read more about digital initiatives). Some of these took the form of wireless electronic readers, either those already sold by Amazon and Sony, or new ones controlled by publishers. Other efforts were aimed at reaching readers through the smaller screens of smart phones and similar gadgets. (Click here to read more about e-readers)

Print Magazines Online

As a group, news magazine websites rank relatively low in the hierarchy of the Web compared with other media. The biggest, Time.com, for instance, attracts one-seventh the number of unique monthly visitors as Yahoo News, which sits by most counts at the top of news sites. Time’s traffic is less than a third of that of the top newspaper website, the New York Time, according to data from Nielsen NetView.

Looking at average unique monthly visitors for the last half of 2009, as calculated by Nielsen, offers the following ranking of magazine online traffic. Many online news executives contend that many of the popular online metrics undercount their audiences, but agree that the relative ranking of the sites is fair. We are focusing on that relative placement here. (Read more about the PEJ analysis of Nielsen data).

  • Time.com was the top site among the six news magazines examined. Among the roughly 200 top news sites of all types, Time.com ranked No. 18.1 (
  • Newsweek.com, which had the strongest traffic of the news magazines during the last half of 2008, suffered the biggest drop in 2009 but remained the No. 2 site among the news magazines, according to Nielsen’s figures, close behind Time.
  • Despite its new emphasis on the Web, usnews.com, the free site, managed less than half the traffic as Newsweek for a third-place ranking among news magazine. Its traffic would put it in the top 20 news sites according to PEJ’s list of nearly 200.
  • The Atlantic.com, which also boosted its offerings on the Web, managed to attract only one-fifth the visitors of  Time.com.
  • There was a considerable drop-off in traffic among the final two magazines we examined. The New Yorker had one-seventh the traffic as Time.com. The Economist, with a third less traffic than the New Yorker, about one tenth that of Time.com, would rank near the bottom of the top 200 news sites.

Online-Only Magazines

Questions persisted about whether the sort of long-form and deeply analytical journalism that has been the province of magazines can manage the transition to the Internet.

There have been several ambitious efforts, from Slate and Salon, for example, and now, at least according to some online, a new entry, the Daily Beast, founded by magazine veteran Tina Brown.

Over all, traffic to online-only news magazines fluctuated throughout 2009, but rarely hit the peaks of late 2008 when the nation was engaged in an avidly followed presidential election. Even the biggest, Slate, still fell short of Time and Newsweek’s websites then in unique monthly visitors, according to data from Nielsen, but attracted twice as many as U.S. News & World Report.

And there was no indication any of the online-only news sites had achieved profitability other than reports that Slate had posted some years in the black, although officials there would not say if 2009 was among them.

Some argued, however, that over the long term online-only continues to have the inherent financial advantage of its low production and distribution costs.2 Said Slate editor-in-chief Jacob Weisberg: “If I had to bet on the prospect of anything, I would bet on online only.  I think the business is inherently better.” 3

Thanks in part to the low cost of entry, the number of online-only magazines of all types grew to 694 in 2009, up from just 168 in 2004, according to MediaFinder, a database of periodicals maintained by Oxbridge Communications.4

Salon.com

Salon.com continued to spill red ink and new chief hired to right the ship said he frankly wasn’t sure the original mission was still the right one.

“It was a mistake to think of ourselves as a magazine,” CEO Richard Gingras told a PoynterOnline columnist. “‘Magazine’ suggests a periodicity that to me does not relate to who Salon is in a news environment on the Web that is increasingly real-time.”5

The Salon Media Group reported a loss of $4.7 million in fiscal 2009, which ended March 31, up from a $3.5 million loss in fiscal 2008. The dismal 2009 figures brought the accumulated deficits since its inception in 1995 to $101 million and Salon’s accountants warned investors there is “substantial doubt” about its ability to stay in business. 6

The company brought in Gingras, a veteran new-media entrepreneur and former Google adviser, dropped a half-dozen of its 29 news staffers and announced a transition away from its roots of long nonfiction articles and toward the faster-paced, breaking-news and commentary prevalent on the Web.

The roots for that shift in strategy are clear in the company’s financial statements, which detail a faltering effort to get readers to pay directly for content rather than luring sufficient eyeballs to impress advertisers.

Paid subscriptions peaked at 89,100 in 2004 and the company said it expected further drops in the year ahead “following longstanding industry trends away from paid Web content.” By the end of fiscal 2009, the magazine had 23,450subscribers who were paying $45 for a year’s worth of access to ad-free content. 7

As a result, the company said it would focus on building advertising revenue, which made up 76% of its income in fiscal 2009. 8

To get more advertising, Salon said in its report to investors that it had to persuade more people to make more frequent visits to its site. That’s hard to do with the sort of long-form articles that take weeks or even months to prepare.

So the publication said it would redesign its site to “improve the presentation of timely and relevant content…that will drive new users to the site and a higher proportion of repeat engagement, as users return throughout the day to obtain timely news and information.” 9

Gingras, in a statement to media news site Gawker, put it more plainly:
“We are moving away from a very traditional magazine production model and becoming more of a true Web publication, with a more direct publishing system.”10

Though this is likely to mean fewer editors spending less time pouring over stories, Gingras said, “The financial changes emphasize what we do best — publish sharp, fast takes on the important events in the world, as well as the in-depth stories, reviews and blogs that readers come to us for — and will also allow us room to grow.” 11

U.S. News Weekly

U.S. News & World Report committed itself to a hybrid model when it gave up being a print news weekly in 2008 and shifted much of its news dissemination to the Web. It produces both a free website that is constantly updated and the subscription-only U.S. News Weekly, which it describes as “Smart analysis, insightful reporting, in-depth perspective — in a new, digital format.”

It also sells access to its trademark guides of colleges, hospitals and other service providers.

There are 90,000 subscribers to the weekly, editor Brian Kelly told PEJ.12 But most of those are subscribers to the print magazine who opted to get a free trial to the digital News Weekly. About 3,000 have independently signed up for the weekly, which costs $19.95 a year.

“We’ve had steady growth. We haven’t really gotten to the point of marketing it very much,” Kelly said. “It’s a small audience but very engaged.”

The Weekly is Washington-centric, in keeping with U.S. News & World Report’s founding principles, he said. Combined with the free site, and the print monthly, “We’re providing more information to more people,” he said.

U.S. News & World Report does not release financial data, or say if it is profitable, but Kelly said about half of its income is from online ads, licensing fees and other sources not related to the print magazine.

“I don’t think the newsweekly concept’s outdated,” Kelly told Portfolio. “I think it’s the delivery method that’s outdated.”13

Slate

Slate, the online magazine founded in 1996 by Microsoft and sold in 2004 to the Washington Post Company, had the strongest traffic of the online magazines and added new channels in 2009.

Slate describes itself as “a daily magazine on the Web… a general-interest publication offering analysis and commentary about politics, news and culture.”;14 This marks an evolution away from its founding, when it was conceived as a weekly publication. It required a paid subscription beginning in 1998 but gave that up and has been free for readers since 1999.

Among its changes in 2009 was the incorporation of two other magazines into the website: Foreign Policy and a women’s magazine, Double XX. Foreign Policy was purchased in 2008 by the Washington Post, which folded its operation into the Slate Media Group and relaunched its website as a channel on Slate, saying it intended to be “a vibrant, daily online magazine. Rather than merely complementing the print edition, the site stands on its own as one of the Web’s premier destinations for international news and opinion.”15

Double XX, which began as a blog on the site, adds to a stable of channels on the site that included a financial news site, The Big Money; The Root.com, focused on African American readers, and a video site called Slate V.

The Slate Media Group also furthered an initiative launched in 2008: the Fresco Fellowship, named for an editor’s fondness for the soft drink and developed to encourage long-form journalism by all staff members. Among its projects in 2009 were a 10,000-word look at “the crisis in American dental care” and an interactive 11,000-word examination of why the country has not suffered a major terrorist attack since 9/11.16

While the projects received a good response from readers although overall traffic to the site fell from the high levels of the 2008 election year.

Weisberg declined to discuss the operation’s finances other than to say that Slate had posted profitable years during its history.17

The organization was trying to diversify its revenue base away from online advertising by developing syndication and licensing fees, charging for Slate on mobile devices, publishing books and attracting affiliate fees for referrals to Amazon.18

“I like the model of a free website, but with paid mobile applications. Down the road, I hope we can add revenue from events and nondisplay advertising, such as lead generation, as well as by selling more targeted advertising at premium prices,” Weisberg said. “Ten years is a century on the Internet, but I’d be very happy to someday see traditional display advertising provide less than 50% of our revenue.” 19

The Daily Beast

The site founded by Tina Brown passed its first anniversary in October with plenty of attention focused on its combination of commentary and reported pieces, including photos and accounts of Iranian protest marches.

Nielsen data show the site ranked roughly 70th among the top 200 news sites, putting it below the website of the Baltimore Sun but above that of the Detroit Free Press.

Over all, Brown said, the response has been “beyond our wildest hopes when we started last October.”20

The site added new channels in 2009, each with the moniker “Beast,” on books, art, food and drink and one called “Sexy Beast” on entertainment and style. It also announced the creation of a book imprint, Beast Books, launched with Perseus Books Group, whose books will be published first online and then as paperbacks. The books will be produced in months, instead of a year or more for most, aimed a filling a gap between online writing and full-length books that magazines once did.21 “Books are the new magazines,” Brown contended.“22

The Daily Beast is owned by InterActiveCorp, an Internet company headed by former Paramount Pictures and Fox Broadcasting chief Barry Diller. The Daily Beast does not release financial figures, but was reportedly losing money its first year.23 The company cited the operating costs of the Daily Beast for pulling down corporate profits in 2009.24

The Daily Beast has published material from a wide array of freelance contributors, including novelist Scott Turow and writer Christopher Buckley, but makes wide use of aggregation as well. Its daily “cheat sheet” aims to direct readers to the most important content published elsewhere. Edward Felsenthal, a former Wall Street Journal editor, is the site’s executive editor.

The publication has no foreign bureaus and Brown was dismissive of the need in her anniversary comments. The Daily Beast was able to follow the terrorist attacks in Mumbai with local freelancers, she said.

“The whole notion of bureaus is so 20th century,” she said. “Get me a smart blogger with a laptop and an iPhone in Tehran or Caracas and the Daily Beast is in business.”25


Footnotes

1. Nielsen uses data provided by the news groups and Time includes 27 entities under the Time.com umbrella, including Life, Time for Kids and Realclearpolitics.com. For November 2009, traffic to time.com represented 68% of the traffic to the family of sites.

2. Jacob Weisberg, PEJ interview, December 22, 2009.

3. Jacob Weisberg, PEJ interview, December 22, 2009.

4.  Mediafinder.com, via e-mail from spokeswoman Lisa Hendrickson, December 22, 2009. The figures are for the United States and Canada.

5. Jacqueline Marino, “Salon CEO Richard Gingras: ‘It Was a Mistake to Think of Ourselves As a Magazine,’ ” PoynterOnline, September 9, 2009.

6. Salon Media Group, 10-K/A filing with the Securities and Exchange Commission for fiscal year ending March 31, 2009.

7. Salon Media Group, 10-K/A filing with the Securities and Exchange Commission for fiscal year ending March 31, 2009.

8. Salon Media Group, 10-K/A filing with the Securities and Exchange Commission for fiscal year ending March 31, 2009.

9. Salon Media Group, 10-K/A filing with the Securities and Exchange Commission for fiscal year ending March 31, 2009.

10. John Cook, “Salon Lays Off Six In Pursuit of Becoming a ‘True Web Publication,’ ” Gawker.com. August 17, 2009.

11. John Cook, “Salon Lays Off Six In Pursuit of Becoming a ‘True Web Publication,’ ” Gawker.com. August 17, 2009.

12. Brian Kelly, PEJ interview, December 10, 2009.

13. Jeff Bercovici, “’U.S. News’ Launching Digital Newsweekly,” Portfolio.com, January 23, 2009.

14. Slate.com, “about us.” Accessed December 18, 2009.

15. Foreignpolicy.com, “About FP,” accessed January 5, 2010.

16. Jacob Weisberg, PEJ interview, December 22, 2009.

17.Jacob Weisberg, PEJ interview, December 22, 2009.

18. The Economist, “Eight questions for Jacob Weisberg,” July 11, 2009.

19. The Economist, “Eight questions for Jacob Weisberg,” July 11, 2009.

20. The Daily Beast. “The Daily Beast Turns One,” October 5, 2009. Accessed December 19, 2009.

21. Motoko Rich, “Daily Beast Seeks to Publish Faster,” New York Times, September 28, 2009.

22. The Daily Beast. “The Daily Beast Turns One,” October 5, 2009. Accessed December 19, 2009.

23. Motoko Rich, “Daily Beast Seeks to Publish Faster,” New York Times, September 28, 2009.

24. InterActiveCorp, third quarter filing with the Securities and Exchange Commission.

25. The Daily Beast. “The Daily Beast Turns One,” October 5, 2009. Accessed December 19, 2009.