The new plan for ailing Newsweek magazine: A smaller, richer audience.
FT: Focusing on a smaller but devoted readership earning an average $100,000 a year will allow the magazine to raise advertising rates, although lower circulation will reduce page rates, making attracting smaller, luxury advertisers easier.
The idea is to capture territory dominated by The Economist and the New Yorker.
How to get there: Double subscription prices, with the goal of lowering the subscriber base from 2.6 million to 1.5 million by year-end. Shedding a million readers or so will also help the company save about $25 million in printing and postage.
It’s a risky strategy: Both the Economist and New Yorker not only have wealthier audiences, they also have a more erudite editorial tone than the traditionally mass-market Newsweek. Pulling off an overhaul of the editorial and business sides in tandem will be a challenge, but with annual revenues falling 13%, there’s not much choice.