It's July 2009, right in the teeth of the biggest business story to come along in decades. The economy dominates the front page that is, after a mandatory splash of Michael Jackson. There is more interest, argument and passion surrounding the condition and future of American business than there has been in several generations. And yet, in the space of three months, two business magazines the organs that exist to offer the stuff people are clamoring for have been abandoned. One, Portfolio, a newbie, was closed. The other, Business Week, an old stalwart, is up for sale, according to reports that caught even the magazine's own editorial staff by surprise.
McGraw-Hill has confirmed that it is "exploring strategic options" for the magazine, which is another way of saying the company does not think it can make money off the magazine ever. It may not be wrong. Less than a decade ago, Business Week ran nearly 6,000 ad pages in a year. This week, a banker valued the magazine at a dollar. "The rapid speed of the switch from print to digital, combined with the extreme severity of the economic downturn, has made it very tough for all weekly magazines," says Stephen Shepard, former editor in chief of Business Week and now dean of City University of New York's journalism school. Of all of them, though, Business Week is in a uniquely precarious position.
Business Week is being crushed by the story it spends so much time covering. The category's core advertisers financial services, automotive and business-to-consumer types have borne the brunt of the recession. And all advertisers now have many more outlets in which to spread their spending. More magazines are covering business, and there are dozens of newer, cheaper digital players on the block.
So while ad pages are plummeting for all magazines, they're flirting with terminal velocity for business titles. The numbers are enough to make a CEO pack it all in (which Jim Spanfeller at Forbes.com just did). In the first half of this year, Business Week ran about 37% fewer ad pages than it did in the first half of last year, according to the Publishers Information Bureau. Fortune, published by Time Inc. (owner of TIME.com), sold 38% fewer pages, and Forbes was down 30% (a number possibly skewed by the inclusion of ForbesLife). But as a weekly, the McGraw-Hill publication has higher editorial and production costs than the other two. And they all have much bigger expenses than the legion of websites that offer business journalism exclusively online daily, even hourly. Industry experts estimate Business Week could lose $20 million in 2009.
Business Week is an educated-consumer read: venerable, respected and well reported. Which is to say, in the argot of new media: old, slow and expensive to produce. It has a website, but it still has to unlace the knotty problem facing all weeklies trying to manage themselves into an online future what does a Web-based weekly look like? How do you get readers to come to you if you're no longer delivered to them? How can you keep the level of journalism high when the income from ads is so low?
Moreover, it's highly likely that McGraw-Hill, unlike Forbes or Time Inc., does not see running a consumer magazine as a core business. What McGraw-Hill does best is provide specialized information: trade magazines, financial-services data, textbooks. The news business is not in its DNA, just as business journalism wasn't in Conde Nast's. Business Week was a stepchild tolerated only as it more or less paid its own way and offered prestige. Once it became a burden, it needed to be hustled off the estate.
All of this is bad news for business magazines. But it doesn't necessarily mean business journalism is in trouble, says Sylvia Nasar, an economist and former Fortune writer who teaches at Columbia University's J-school. There's more demand for it than ever, and more outlets providing it also part of Business Week's problem. "This [economic crisis] is a great story," she notes. "There is and will be more great journalism on it."
Just before he found out that the folks who paid him were seeking someone else to do it, BusinessWeek.com's editor in chief John A. Byrne wrote, "What newspapers and magazines are going through right now is a business-model problem, not a readership problem." For Business Week, actually, it's a bit of both: the magazine's total audience declined during the first six months of 2009, according to the latest MRI data, while Fortune's and Forbes' grew. Interestingly, in the same period, its website, with the much touted Business Exchange a business-news aggregator cum social-networking site increased its readership, usually drawing a little over 5 million unique visitors a month, according to Compete.com. That's not a bad showing, but it's no savior for a weekly magazine that is losing readers and hemorrhaging money.