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Analysis & Opinion
25.10.10 Memories Of Newsweek
By Svetlana Kononova

Last week the German publishing house Axel Springer announced the closure of Newsweek Russia, a Russian-language magazine which had been licensed from Newsweek since 2004. This is just one of many instances of independent media disappearing in the country, but experts believe that the reasons behind the shutdown were for the most part financial, and not political.

In Russia, independent media outlets have been living under some cloudy skies lately.
Russian Newsweek has been closed, while another critical voice – the Novaya Gazeta daily, a paper renowned for its investigative coverage of Russian political and social affairs – might face closure after a Moscow court threw out its appeal over an extremism warning from the federal media watchdog. The fourth anniversary of the unsolved murder of Anna Politkovskaya, a reporter for Novaya Gazeta and outspoken critic of the Kremlin who was killed in the elevator of her apartment building in Moscow, coincided with the journalism faculty of Moscow State University releasing a provocative calendar featuring half-dressed female students confessing their love for Prime Minister Vladimir Putin.

But in the case of Newsweek Russia, publishers say the closure wasn’t due to political pressure. “We are proud that Russky Newsweek has been prominent, award-winning and met the highest standards of journalistic work for six years. We thank editor in chief Mikhail Fishman and all journalists and employees of the editorial and publishing house for their excellent work. Unfortunately, we have failed to bring the magazine to a firm economic base and we could not create a prosperous perspective. With respect to these circumstances, we decided not to renew the expired license agreement with Newsweek Inc. Axel Springer Russia has an excellent market position thanks to its portfolio of numerous successful media brands and we will direct our efforts to further develop and acquire profitable business in the future,” a statement from the company said.

Axel Springer Russia, a wholly-owned subsidiary of German Axel Springer AG, currently publishes the Russian edition of Forbes business magazine, the OK!, GEO, GALA Biography magazines and several others titles. “This story probably has no political connotations,” said Ilya Yashin, a leader of the Solidarity opposition group, on the closure of Newsweek. “The decision to close the magazine was made in Germany, not in Russia. So the official version of economic reasons seems plausible. The crisis hit print magazines pretty hard.”

Milena Bakhvalova, the editor of the economic policy department at RBC magazine, believes that Newsweek could not find its niche audience in Russia. “Firstly, Russian Newsweek probably made a mistake when it decided to focus on a young audience and adapted its style to suit young and inquisitive readers. But very few people in their 20s in Russia are ready to buy such magazines. Most young people are not interested in profound analysis and even in business and politics at all. So Newsweek could attract a smaller audience than expected,” she said.

The second reason is that Russian advertisers have a different mentality than advertisers in the West, media experts believe, which explains why the traditional American concept of a weekly business magazine does not always work in Russia. “Russian advertisers prefer magazines that supplement direct advertisements with so-called ‘informational support,’ such as interviews, experts’ commentary, etc. This approach is very popular in Russia, but is prohibited in American licensed magazines. As a result, print titles that ban ‘PR support’ make much less profit than their competitors who allow it, while their expenses are the same,” Bakhvalova explained. “For example, it was one of the main reasons why the other American magazine – Business Week – was closed in Russia in 2008.”

Olga Vdovina, the deputy director at the Internet portal that focuses on the publishing business and advertizing in the mass media, agreed that Newsweek Russia’s economic hardship was caused by its erroneous development strategy and the generally difficult conditions on the media market. “Newsweek entered the Russian market too late, when the business magazine niche was already occupied by successful Russian brands. It had little time for promotion – just four years before the economic crisis hit Russia and less than two years before the crisis hit the United States. Newsweek’s marketing team was made up of professionals who did everything possible in such circumstances,” she said. “Generally speaking, Western print business media are hardly suitable for the Russian market. Many attempts to publish west European business magazines in Russia have failed.”

“Two thousand and ten was very difficult not only for print media, but for radio and outdoor advertising as well. The main reason is the redistribution of advertising budgets. Large international companies now spend most of their advertising budgets on television,” Vdovina continued. “As a result, many print media, especially glossy and business magazines, lost up to 60 percent of their advertising budgets. Many projects were closed. We can see that the publishing market is getting divvied up once again.”

Bakhvalova believes that Newsweek Russia had its golden age when Leonid Parfyonov, a famous Russian news anchor, journalist and author of some popular television shows, was its editor in chief. “In those times journalists traveled a lot and wrote lots of features. Therefore the content of the magazine was more interesting and of better quality than articles in other print media written by their colleagues, who used the Internet and phone to find information,” she said. Later Newsweek’s budget was reduced, and the number of reports decreased. At the same time, the Russky Reporter (Russian Reporter) weekly magazine entered the market and became Newsweek’s main competitor. It ran more interesting and up-to-date feature stories with more profound analysis.

“Newsweek became a victim of the modern profit-making approach to journalism. Many publishers now tend to cut down expenses on authors. They have few staff writers and pay them modest salaries. This is a general problem in the Russian mass media, and it was at Newsweek as well. In August and September several highly-paid Newsweek journalists were fired and replaced with ‘cheap’ recent college graduates,” Bakhvalova said. “Publishers expect a fast return on investment. But a lot of time and money is needed to attract readers and advertisers to a new project. Even the super-popular Kommersant newspaper was unprofitable for many years.”

Some experts also ascribe the death of Russian Newsweek to the development of electronic mass media. When all news, reports and analytics are available on the Internet, it makes no sense to buy print editions anymore, they say. But other experts disagree. “It is too early to say that electronic media can completely replace traditional print media. How can electronic media survive? It can’t make a profit from distribution, like print media, and now there are only four to six Web sites in the Russian Internet that make huge profits from advertising,” Vdovina said. “It is hard to believe that print media can die soon. IPads can’t compete with the pleasure of flicking through the pages of a magazine while drinking a cup of coffee.”
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