When The Week launched in 2001, the Wall Street Journal asked if its owner was “mad” to take on famous weeklies like Time and Newsweek. Over a decade later, those publications are on the ropes, while the The Week has defied the odds to become profitable both online and in print.
In a recent interview, CEO Steven Kotok explained how The Week has bucked the fate of the troubled magazine industry, and how the publication plans to stay relevant in the future.
An American Aggregator
The idea of a “weekly” news magazine seems quaint in the age of the internet, but The Week has carved out a niche by distilling current events into a smart bundle of excerpts and opinions. It aspires to provide tight writing and snappy headlines that let readers feel in-the-know about news, culture and policy.
According to Kotok, this style of curation was considered a “weird thing” when The Week launched and the site had to persuade advertisers it was viable. Now, nearly publication does it one form or another — a situation that would seem to erode The Week’s strategic advantage. But Kotok says the publication is still growing its subscription base by catering to a distinct “psychographic” (read: affluent, educated folks) and by promoting a left-right political discourse.
“Kids buy it for their parents and vice versa. You might buy it for your conservative uncle or your liberal nice – it’s a way to get the other side in.”
The pitch appears to be working. The company says it has a rate base of 550,000 readers and annual revenues of about $50 million. It says it has had annual profits of between $4 million and $5 million in each of the last three years.
Most of that profit is coming from home subscription sales (fewer than 1% of its readers come by way of a newsstand) but, increasingly, The Week is looking to the web to make money.
Building the digital domain
With a few exceptions, like the Atlantic, legacy print titles have fared badly online – slow starting and caught between two worlds, they lose to digital natives.
In the case of The Week, Kotok admits it was late to develop a web strategy, but says its site is now profitable. Citing February comScore numbers of 2.3 million unique visitors, he says The Week has surpassed the Economist in two of the last three months.
The Week’s website doesn’t reproduce the magazine’s content but instead offers a stream of smart, snackable news bites along with “Guilty Clicks” from around the web (“Do we really need a drone hoodie”, Ke$ha, etc). The online fare is produced by a separate group of writers that represent about half of The Week‘s 29-person editorial team.
The site earns its keep by selling advertising to major companies like IBM, Xerox and Zurich Insurance but also serves as a vehicle to heavily promote its print cousin. Kotok credits the site with bringing in $1 million a year worth of magazine subscriptions.
On the tablet front, Kotok says iPad advertising and subscriptions (access is free for print subscribers) are producing almost $1 million in sales but that the Apple relationship is difficult. “It’s hard because we’re used to having a reader relationship but Apple controls that. Sometimes they promote you and sometimes they don’t.”
The future: commerce not a tin cup
Having discovered that readers are not put off by price increases — The Week‘s average annual price has risen from $30 to $50 in the last six years — Kotok says he is now focused on revenue rather than subscriber growth. Gift subscriptions, which are a big part of The Week’s business, will be an ongoing source of income but, in the long run, the company still confronts a magazine business that is in wide and permanent decline.
The Week also faces a more immediate challenge in the Post Office’s plan to end delivery on Saturday (the day the magazine arrives in readers’ mailboxes). Kotok says he can meet the Saturday challenge by shifting production schedules, but that the publication is also focusing on developing other revenue streams – a tactic that is becoming necessary to media outlets of all kinds.
For now, he says, that will not include a paywall or donations experiment of the sort being conducted by Andrew Sullivan. Instead, The Week is betting on ecommerce to compliment its editorial strategy. “We won’t put out a tin cup. Many of our subscriptions are gifts so our ecommerce will be too,” Kotok says, suggesting that The Week fans will buy each other t-shirts, books and more.
The Week’s ecommerce experiment will be helped by its 2011 acquisition of Mental Floss magazine, which has an online store that brings in 30% of its $10 million. Items for sale include smart people t-shirts (“Pi Hard,” “Spell Czech”) and quiz books. In its push into retail, the company will be joining the likes of Gawker Media and Thrillist, which are likewise trying to leverage content into ecommerce.