Jay Penske, who bought the century-old Hollywood tabloid Variety in a fire sale last year, has clearly gotten religion about the power of the web — which isn’t surprising, since his Deadline Hollywood site is likely one of the factors that helped bring about Variety’s demise. So it shouldn’t come as a shock that Penske is dismantling much of the existing magazine, including its daily print edition, and is getting rid of the paywall in a move he described as “the end of an error.”
Variety announced the moves early Tuesday, saying the tabloid will drop its daily print edition as of March 1 and publish only a weekly version on paper. The paywall, which charged users $250 a year for access to Variety content, comes down at the same time — Penske called it “an interesting experiment that didn’t work” — and in a somewhat unusual decision, the paper’s editor has been replaced with three editors, each of whom will run different sections of the magazine.
Penske, the son of famed race-car driver and NASCAR operator Roger Penske, isn’t a newcomer to the power of digital: he was a co-founder of Mail.com, which he sold to a German internet company in 2010, and before that helped start a mobile company aimed at children called Firefly.
The new owner bought Variety in October from owner Reed Elsevier for $25 million, after the European publishing conglomerate reportedly cut the price it was asking for the magazine — once reportedly valued at more than $200 million — by 25 percent. Penske added it to a stable of online properties that includes the Deadline site and MovieLine.com, as well as the well-regarded technology blog Boy Genius Report and HollywoodLife.com, a site run by former the former editor of Cosmopolitan, Bonnie Fuller.
If Penske was hoping that his moves would be applauded by his other sites, he doesn’t know veteran Hollywood gossip writer Nikke Finke, who runs Deadline Hollywood. In a scathing post about the dropping of the paywall and the decline of what she called “the beleaguered trade,” Finke said editorial morale at the entertainment trade magazine “is at its lowest ebb and anxiety is running sky high,” and described advertising as “non-existent” and readers as “few and far between.”
Sharon Waxman, who runs an online competitor called The Wrap, also warned that Variety could have a lot of work on its hands, since — like many other newspapers and magazines — print advertising in the daily edition likely made up a large proportion of its revenues.