Newsweek, one of the most venerable names in news magazine history, is back in print again after a two-year hiatus. The long-time liberal nemesis of conservative arch-rival Time Magazine, went to a digital-only format in December, 2012 in a last-ditch effort to save the brand. That experiment was declared a failure by the end of 2013.
When that did not work, Barry Diller, the media mogul who had inherited control over Newsweek from his late friend Sidney Harman, sold the news magazine to IBT Media, a tiny digital only publisher, with strong conservative Christian ties.
The new Newsweek came out swinging with its first issue on March 2, now on newsstands, with a blockbuster scoop about breaking through the wall of secrecy to reveal the identity of super-secretive Bitcoin founder Satoshi Nakamoto to be none other than…Satoshi Nakamoto
That scoop notwithstanding, the new Newsweek has a tough job ahead establishing itself as a respected journal in the face of concerns about the editorial direction the new owners might take. With a more conservative bias in its editorial content, the publication may find it difficult to attract back its old liberal audience…or attract more conservative readers to an old liberal brand.
“News-Week” was founded in 1933 by Thomas C.J. Martyn, a former Time Magazine editor, with blue chip backing from the Cheney, Whitney and Mellon families. The magazine merged with Today, another weekly journal, in 1937, which brought Averell Harriman and Vincent Astor into the paper as investors. Astor became the chairman of the board until his death in 1959. Harriman had the unique distinction of running for the presidency on the Democratic ticket twice, and losing to the same man, Dwight David Eisenhower, twice.
Despite its celebrity-studded board of directors, Newsweek (as the magazine became known from 1937 on) was always second-fiddle to the more successful Time Magazine. Its greatest journalistic accomplishment was probably its coverage of the Watergate Scandal, logical since Newsweek was very much a bastion of the Democratic Party offsetting Time Magazine’s decidedly more conservative bias. Its most notorious setbacks were probably the cover photos showing former Republican presidential aspirant Michele Bachmann and Vice President candidate Sarah Palin in unflattering poses. There were also allegations of plagiarism against several reporters.
Newsweek was bought out by The Washington Post Company in 1961. After years of declining subscriptions and advertising revenues, Newsweek moved away from hard news coverage, focusing instead on opinion and commentary. Continuing mismanagement lead to an operating loss of $29.3 million in 2009, up from a $16 million loss in 2008.
The Washington Post, itself in financial straits, was unable to continue carrying Newsweek’s losses and sold the magazine to Harman-Kardon co-founder Sidney Harman in 2010. His $1 bid was taken over four others, including one from Syrian entrepreneur Abulsalam Haykal and a group of Middle Eastern investors. Harman agreed to pick up the magazine’s liabilities as part of the deal. (Harman was married to Jane Harman, former California Congresswoman and currently head of the Woodrow Wilson International Center for Scholars, a Democratic party think-tank.)
When Harman died in 2011 at the age of 92, Newsweek became Barry Diller’s problem. Diller had gone into partnership with Harman, both of whom had strong ties to the Democratic Party, to save the magazine. After Harman passed away, Diller put Newsweek into a joint venture with The Daily Beast, hoping that Daily Beast owner Tina Brown could help revitalize the Newsweek brand.
When that failed to work, Diller sold the magazine, then only in digital form, to IBT Media, which now publishes 10 online publications, including such titles as International Business Daily and Medical Daily. Co-owners Etienne Uzac and Johnathan Davis founded their company in 2006, using only their own personal funds. Revenues were reported at $21 million for 2013. Both men have held executive positions at Olivet University founded by controversial evangelical pastor David J. Jang but there is no evidence that Jang has any direct involvement in the firm.
A resurrected Newsweek might be considered good news for the beleaguered US publishing industry but the new Newsweek is being published as a luxury item, according to Bloomberg/Business Week. A quick cost comparison calls that judgment into question. The new Newsweek wants $140 annually for the print edition and just $40 annually for the digital-only access,but that may not be much of a luxury. The digital-only version of the New York Times costs $195 a year. The annual cost for the printed version of the daily editions of the New York Times cost $2.50 a day, or $782.50 per year. The New York Times Sunday edition costs $5 per week or $260 a year. Compared to those prices, the new Newsweek is a bargain. News is expensive.
The new Newsweek has started off with a bang, with the cover story on its maiden issue about the “discovery” of the identity of “Satoshi Nakamoto,” the man credited with creating the Bitcoin phenomenon. In a copyrighted article, Newsweek reporter Leah McGrath Goodman identifies the mysterious Nakamoto with another Satoshi Nakamoto, creating a firestorm of controversy over whether or not he is the same man, and whether Goodman had any right to “out” him. The story has ignited a great deal of conversation and recrimination on the internet, which is exactly what a new publication wants today: buzz.
The story of Goodman’s coverage of the Nakamoto story is the story inside the story, and that is the kind of thing that journalists are schooled to avoid. “Cover the story, but do not become the story” is the rule that most journalists try to follow but, sometimes, reporters can not avoid becoming part of the story and this is one of those occasions.
Newsweek may be back in print with very different owners but, when it comes to making a splash with their first issue, their cover story did the trick. Newsweek is back.
By Alan M. Milner