Newsweek to close print edition: should you close your bricks business and go all digital?

Newsweek has a print customer base
of about 1.5 million and has decided to go all digital. Should you close your
bricks business and go all digital? No,
and here is why from the magazine business that should apply to other
brick/click combo businesses:

  • Bricks will always be there: So long as human beings have physical bodies and
    senses of touch taste, smell etc. the bricks world will have a market. It
    does feel nice to read a Newsweek or Time at the dentist's waiting room.
    And when you get that 80-90% off offer for the print magazine you do tend
    to sign up. Time magazine has 3.3 million subscribers while
    Newsweek has about 1.5 million
    subscribers. 
  • Getting online paid subscribers is hard: According to Felix Salmon of Reuters
    , Huffington Post tried the paid subscriber model for just five issues
    before going free. There are almost no chances of picking up the 1.5 million
    subscribers that Newsweek print would have to convert to digital
    only. 
  • Thinking Brick costs is a fallacy: Newsweek Editor Tina Brown says that it costs $43 million to
    produce the print magazine including the paper, printing and distribution,
    before hiring a single writer. Going by this logic almost every venture
    that serves large numbers of people spend more around the supporting infrastructure.
    Thus every major university and hospital spends far more on the campus,
    equipment, managers, support staff than the faculty and doctors.
  • What business are you in – the US News case: What business are you in, is the question to ask. US News went all digital since
    2010
    and have an iPad subscription version at 99 cents that has
    very few takers – comparatively speaking. However, rankings in various
    categories like colleges etc. provide US News with a huge following. There
    are 50,000 subscribers for the college rankings detailed information at
    $29.00. There are 10 web clicks for rankings against two web clicks for
    news and note that both produce no revenue for US News. In other words, US News appears to be more in the rankings business than the news business.

One must wonder if Newsweek actually
asked its print subscribers why they really subscribed to the print magazine,
for when you have a customer base in the brick world you have an ongoing
relationship in the CRM sense. Asking customers to change to digital en
masse
also raises the question of the technology adoption ability
of the entire customer base.

To summarize,if you have existing "bricks" customers make sure that they will be able and willing to pay for your product digitally before you go entirely digital.   Contact StratoServe.

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