Newsweek Abandons Print

Tina Brown calls it a transition, but its an unfortunate reaction to cost savings in the world of print media. The downturn in advertising and the limitations around new product development are driving many publishers to the last stand - All Digital. This is not some kind of metamorphosis for publishers – it's a last attempt at saving a historic media brand. Unfortunately for traditional print publishers the explosion of growth in the tablet market hasn't translated into significant revenue streams. I don't know if the technologist or the productions teams are hiding the fact that creating "cool" magazine apps is expensive and time consuming. And worst, the continued growth in the tablet market will not have a direct correlation to growth for in app magazine products.

Recently, I listened to a top executive of a well-known media organization demo his organizations latest app for the iPad. He showed beautiful images, videos, swipes and grabs. Then he looked across the audience and said isn't that "cool" - nothing that he showed was "cool" or unique from the core functionality of a tablet (or the iPad in this case). His demo illustrated the fact that only two resources were needed to produce this new product that was a significant new revenue stream for the company.
So I did some math. I took the 100k downloads he mentioned and multiplied them by the $3.99 cost of buying an issue. So $400k, not bad! Then I discounted Apple's cut  (-30%), now we are down to $280k, still not bad. But during the discussion it comes out the 6 interns are working on the apps ($15 hr)  and a group of 5 full-timers are as well. Let's say he got a good deal on resources and the 5 FT's earn $50k a yr (not likely) -  let's subtract $250k. I have forgotten about the interns at this point - let's call them "free". So his new revenue stream for this highly touted product is $30k, using very forgiving calculations.