U.S. weeklies trim foreign presence

By Thomas Crampton International Herald Tribune

SUNDAY, JANUARY 15, 2006

PARIS Adapting to competition from the Internet in a downward advertising cycle, the largest U.S.-based newsweeklies have adopted sharply different tactics for the future of their international editions - and none of them involves expansion.

 

Editors at Newsweek, Time and BusinessWeek emphasize their commitment to international coverage. Yet within the last month, staff reductions at Time and Newsweek and the outright closure of BusinessWeek's international print edition will almost certainly reduce the amount of news and analysis of global affairs.

 

The wave of "cutbacks at these major U.S. news weeklies overseas is a significant event," said Doug Arthur, a publishing industry analyst in New York with Morgan Stanley. "You cannot help but see this as a major retreat."

 

In casting the pullbacks in a positive light, Newsweek points to its expansion into local language editions around the world, Time sees advantages in editing separate editions out of Asia and London, and BusinessWeek says it will seek its global audience through the Internet.

 

A soft advertising market and the efficiency of distribution via the Internet are the causes. Although the magazines are all profitable, U.S.-based advertising revenue for 2005 through November at Time was down 16 percent, at Newsweek off 13 percent and at Business Week down 11 percent, Arthur said, after three years that were already weak.

 

The international editions for the three magazines are much smaller than their domestic counterparts. Newsweek's international edition, for example, has a circulation of 475,000 compared with 3.1 million for the domestic edition. International editions and foreign coverage are often the first to face cuts in tough times due to the higher cost and lower advertising returns.

 

"You can see the argument around the potential revenue from international editions not being sufficient, when compared to just putting the magazine up on the Internet," Arthur said. "It is easy to cut back when the print editions don't give the biggest bang for the buck."

 

The Internet, which accounted for $11.7 billion in advertising spending last year in the United States, remains a small market compared to the $188 billion spent on U.S. advertising over all, but Arthur said the potential for growth is what attracts publications.

 

Indeed, Business Week has described closing its international editions as a way to increase foreign readers on the Internet. The number of international visitors to the magazine's Web site, www.businessweek.com, has nearly doubled in the last year, representing roughly a quarter of all visitors, said Kimberly Quinn, Business Week's director of communications.

 

To cater to former readers of the international print edition, Business Week will further customize the online editions for English-language readers in Europe and Asia.

 

"We are taking this action to harness the growing power of the Web globally and to serve readers and advertisers in a more timely, efficient and targeted way," Quinn said, adding that Business Week intended to bolster online coverage of global financial markets.

 

She said Business Week would continue to license to foreign publishers the non-English editions in Arabic, Turkish, Russian and Chinese.

 

Licensed local-language editions will also continue to be a key part of Newsweek's strategy, said Greg Osberg, the worldwide publisher of Newsweek, which he said laid off a handful of staff and cut back on use of contract writers.

 

The largest of those editions, Newsweek Polska, was launched in Poland in 2001 and now has a circulation of 174,000. There are also editions in Japanese, Spanish, Chinese, Korean, Russian and Arabic, as well as one produced under license in Australia in English.

 

"We see a role for Newsweek magazine in the international market because we bring a centrist attitude," Osberg said. "Granted, we are an American publication, but we do not take sides politically."

 

Time, with separate newsrooms in London and Hong Kong staffed by more than 40 journalists, has the largest international structure of the three magazines.

 

"We are genuinely confident with the model we have," said Mike Elliott, the Hong Kong-based editor of Time's Asia and Europe editions. "We're just seeing if we can find new ways of getting the two newsrooms to work together."

 

Time Inc. has cut a total of more than 100 senior staff members in recent weeks and the international layoffs have included cutting bureau chiefs for Beijing, Seoul, Jerusalem and Moscow, and it has announced there would be layoffs in the London newsroom.

 

Describing the layoffs as "trimming," Elliott said the magazine intended to keep distinct editions.

 

Whatever the public rationale, downsizing overseas operations is misguided, said Roy Peter Clark, vice president of the Poynter Institute, a U.S.-based journalism organization.

 

"In the immediate aftermath of 9/11 and the war in Afghanistan, the leaders and owners of news organizations committed resources to international coverage on a scale they would never do in peacetime," Clark said. "Now it turns out that was a one-shot deal that hasn't even endured as long as the war."

 

As a result, he said, readers will have a more limited view of world affairs.

 

Yet Jim Gaines, a former managing editor of Time magazine, said that staff cutbacks and reduced coverage do not necessarily mean fewer readers.

 

"Editorial quality can suffer from a cutback, but that does not necessarily mean you lose readers," Gaines said. "From a business perspective, it is hard to know if the magazines will suffer from these cutbacks."

 

Clark said: "These companies make a level of profit that would be the envy of other industries. The problem is that Wall Street sees print media as a mature industry."

 

While their U.S.-based counterparts suffer, The Economist, the London-based news weekly, has hired correspondents for Jerusalem and Chicago within the past year and is undertaking a push to increase readership in the United States.

 

"Businessmen in Chicago now find they need in-depth analysis about businessmen in China, and vice versa," said Emma Duncan, deputy editor of The Economist.