Newsweek, Daily Beast together have lost about $30 million
Tina Brown says The Daily Beast website is on track to be profitable this year, but Lucia Moses points out that getting the combined NewsBeast into the black by early 2013 -- Daily Beast backer Barry Diller insists that's possible -- will be a daunting task. "If that task takes years and Newsweek can’t find a way to regain the relevance weekly newsmagazines have lost since the explosion of news on the Internet, then Diller and Jane Harman, Sidney Harman’s widow, could reach the point where they finally decide to cut bait," she writes. "The idea that NewsBeast could ever become a successful operation has always seemed far-fetched." On the bright side, Newsweek's newsstand sales are up under Tina Brown, "but newsstand sales are only 3 percent of the magazine’s circulation, and they don’t make it much money," notes Moses. Reed Phillips, managing partner at media investment bank DeSilva+Phillips, tells her:
I don’t think it’s a quick turnaround. Advertisers are going to take time to get comfortable that Newsweek is on a solid foundation. And the ad market’s jittery already. I think the biggest challenge is, it has to be redefined in a way that has to be engaging with readers. New York magazine did it. With the talent The Daily Beast has, there’s anticipation that that can be done. And it needs more of an edge compared to what it was in the past, before they bought it.
Brown said last November that it will take "a while" for her to make on Newsweek, and that the print/website combo is "a good model." She told WWD.com: “You’re seeing this with Bloomberg and BusinessWeek, and Politico and its newspaper, and now you’re going to see the Daily Beast and Newsweek.”