In Paywalls We Trust: How The Magazine Industry Can Weather The Coming Digital Transition

Newsweek, the magazine that wasn’t U.S. News & World Report or Time, is going completely digital and will offer something called Newsweek Global in place of its international selection of paper tiles. Editor Tina Brown describes this move, which will take place at year’s end, as “embracing the future.”

I should hope so.

Whither Newsweek goes, the rest of the magazine industry will go. I’m an infrequent paper magazine reader – I buy them before flights so I have something to look at before I can turn on my tablet at 32,000 feet – and I’ve found that my absolute favorite magazines, the New Yorker and the Economist, have weathered the transition to digital quite well. Comically, both maintain advertiser-rich print editions that presumably buoy finances. I worry, however, that magazines like Time and Rolling Stone will survive with far less success, although there are a few potential silver linings in this beclouded sky.

First, there are the naysayers. Felix Salmon says the whole idea is risible (but then again isn’t Reuters a primarily online effort that is essentially kept afloat by business subscribers?) and that no one will write for or buy the paywalled Newsweek when Brown’s The Daily Beast is a click away. He writes:

The chances that Newsweek will succeed as a digital-only subscription-based publication are exactly zero. If you had a team of first-rate technologists and start from scratch trying to create such a beast, you’d end up with something pretty much like Huffington — which lasted exactly five issues before bowing to the inevitable and going free. There’s no demand for a digital Newsweek, and there’s no reason, either, to carve off some chunk of the NewsBeast newsroom, call it “Newsweek”, and put its journalism onto a platform where almost nobody is going to read it.

While I would argue that services like the Daily – aimed at red-suspendered traders interested in sports news and news bits on their way to work from the wilds of New Jersey – are still in their infancy, the general consensus is that the paywall, like it or not, will have to exist for the magazine industry to survive.

According to best estimates, the print magazine industry is winding down. This year 181 titles launched and 61 titles closed. Newsweek’s own subscription base was stable, dropping 9% since 2006. 1.1 million people expected the magazine to pop up in their mailboxes weekly, a number bolstered by subscription deals that were often too good to be true. One deal I found offered 54 issues for $39, valuing the individual magazine at 72 cents.

Would you buy digital Newsweek, then, for the same 72 cents? First, Tina Brown isn’t asking you, educated and highly literate Internaut with a Flipboard catalog full of obscure RSS feeds. She’s asking an older generation just getting acquainted with digital media to do this and it’s my wager that they will.

We are, in short, in an era of media transition. Newsweek can survive in this era because it is a trusted brand that can exist outside of the fast-moving bubble of blogs and “web properties.” In the Venn diagram of Newsweek readers and, say, TechCrunch readers I would expect the overlap to be minor. The new Newsweek is aiming at less-savvy yet news-hungry readers whose subscriptions have been grandfathered over to their iPads. Those 1.1 million subscribers will receive a renewal notice, understand when their Newsweek app has been updated with new content, and will be happy to read whatever the heck Newsweek writes about these days. It’s a brand they trust.

The reason piracy is, in fact, rare is that it’s hard. Being a pirate – or at least figuring out the vagaries of ThePirateBay – are a young person’s game. The Kindle is popular because it reduces the friction of buying books to almost piracy-slick levels. Whereas the pirate revels in the smooth transition from link to content, the Kindle user revels in the smooth transition from “Buy This” to reading.

We constantly expect no one to pay for anything. That is not the case. People will pay because it’s easier than not paying. Here’s hoping that Newsweek, once one of my favorite magazines if only for the jolly front page full of quips and editorial cartoons, can bridge that chasm. If they can’t, they’ll sink, just as so many magazines will in the next few years.