Dead Magazine Walking

Every so often you stumble over a statistic that takes your breath away. Here's one:

Newsweek's paid newsstand circulation averages just under 67,000 copies a week.

WTF? Only 67,000 people take money out of their pocket each week to buy a copy of a national magazine in a nation of more than 300 million people? That really doesn't sound good. And it gets worse when you take the math a couple steps farther.

Let's see if we can estimate how many different places Newsweek can be purchased. Newsstand sales aren't restricted to newsstands; they include all places magazines are sold, including supermarkets, bookstores, etc. So let's do some math:

• There are slightly more than 35,000 supermarkets in the U.S. Most of them probably offer Newsweek in their checkout lines.
• There are about 50,000 drug stores in the U.S. Let's say half of them sell magazines.
• There are 4,000 bookstores in the U.S. Again, let's say half sell magazines.
• There are a bit more than 3,400 newsstands.
• Let's not forget 7-Elevens, which all sell Newsweek: 5,700 of those. There are probably at least as many other convenience stores under different names.

Take all of those together—and I'm doubtless leaving out many other outlets where copies of Newsweek can be purchased—and you get 70,000 or so possible places you can plunk down $5.95 to pick up a copy of Newsweek.

In other words, unless something in my math is wacky, Newsweek sells an average of less than one newsstand copy a week in each place that it's available. Oh my.

That's just Not Good. You have to wonder if the magazine even can break even distributing that many copies to that many places and selling less than one copy apiece (to say nothing of the returns--there usually are several copies on the rack, of course).

It's not like Newsweek is making it up on subscription circulation, either. It recently announced plans to reduce its circulation rate base to 1.5 million copies a week—from a recent high of 3.1 million. And of course, a lot of that circulation is in the form of heavily discounted subscriptions. 

Then there's Newsweek's advertising—such as it is. It's a pretty thin magazine these days.

Guess all this is why Newsweek lost $20.3 million in the first quarter of this year on revenue of $46.1 million. Those are ugly numbers. But given the circulation statistics, they're hardly surprising. It's a little hard to see why—especially in an age of real-time online news—The Washington Post Co. is keeping Newsweek alive. Readers (and advertisers) just don't seem to care.

Comments

[Terry Greene Sterling]

I'm told my book will sell for around $16.95 when it hits the stands in the spring of 2010. So what is newsstand price for one issue of Newsweek?

[Steve Klein]

Newsweek is trying to be something is wasn't. Who has time to read a magazine, no matter how intelligent it tries to be be, that is a week late and, as you point out, more than a dollar short. I really like Jon Meacham, but he's screwed up; this doesn't work.

[Mark Potts]

As the post says, the newsstand price of Newsweek is $5.95.

[Virginia Postrel]

The number sounds bad, but what was it, say, 10 years ago? How significant have newsstand sales been for Newsweek historically? Some magazines sell a high percentage of copies on the newsstands, while others are almost entirely subscriber publications. Without telling us whether this is a huge drop-off from Newsweek's past performance, it's not a very meaningful analysis. The magazine is indeed in big trouble, but this comment doesn't prove it.

[Mark Potts]

According to this Portfolio story (http://bit.ly/12Abjj), Newsweek's newsstand sales were running at about 85,000 a year or so ago, and at about 110,000 a few months before that. The decline has been precipitous. As that story says, newsstand sales "are still the best and most direct indicator of consumer interest, whereas subscription totals can be manipulated through any number of devices."

[Magazine guy]

This is an interesting post and you make some good points. Some notes though:

>Newsstand sales are not the best indicator of consumer interest. They can be manipulated by purchases of promotional space and magazines' newsstand sales rise and fall with those purchases.

>Other than celeb mags and titles such as what maxim once was, a great many magazines do not make their money on newsstand sales. Newsstand visibility is often used to raise a magazine's profile to advertisers, where the bulk of much revenue comes from.

>Even 10 years ago less than 5% of each Newsweek's, Time's, and US News's total was came from newsstand so we're talking about the fluctuation of a 3 - 4% portion of their circ, nothing they will live or die by.

>Newsweek sells about as many newsstand copies each week as The Economist, a healthy and thriving magazine.

>You could be off by tens of thousands in your estimate of number of locations that sell newsweek. But you could be right too. A weekly magazine such as Newsweek likely sells only 20% - 25% of the copies it distributes.

Hope that helps.