Tom Ascheim '90, CEO of Newsweek, Delivers R. Peter Straus '44 Distinguished Lecture
Pointing to the extraordinary interest in the last election cycle, Tom Ascheim YC ’85, ’90, Chief Executive Officer of Newsweek Inc., said the demand for high-quality news has not declined but the industry’s business model has not kept up to provide people the sort of information they’re seeking in an economically viable way.
Amid a media landscape undergoing seismic change, he said the industry needs to see itself as a springboard for engagement. The era of any single outlet serving as a one-way, complete source for what people need to know is long past. Ascheim said, “There are a lot of ways to find out what happened. People don’t care so much about their source for ‘what.’ For ‘why,’ they want expert opinions.” He added, “Our job is to be opinionated but not partisan. We are starting conversations.”
The context and commentary provided by Newsweek’s print and online publications will aim to spur dialogue whether through the web or with family and friends, said Ascheim, speaking to an SOM audience on December 2, 2008, as part of the R. Peter Straus ’44 Distinguished Lecture Series, which brings leaders in the media to the school to discuss current issues surrounding the press and public responsibility.
Joining Newsweek in October 2007, Ascheim crossed the line from entertainment into journalism after 17 years with Viacom, which included leading early cross-platform digital efforts, starting up new brands Noggin and The N, and overseeing the Nickelodeon television channel. He said he spent much of the last year learning the new company and designing a strategy for moving forward. “What I learned at school here was an approach,” he said. “How do you look at a problem strategically? There’s competition. There are consumer trends. Where is there tension in the business model? Where is there opportunity? Those general approaches work every time. It doesn’t really matter what the business is.”
Ascheim noted that cable television has been successful through segmenting audiences that hadn’t previously been differentiated and targeted with customized content and advertising. In a similar way, he said, Newsweek has traditionally advertised to everyone. “Maybe the target is slightly more elite — the people who care about reading magazines,” he said.
Citing research that shows magazine readers tend to be more affluent, Ascheim said, “magazines in an odd way have become inexpensive luxury items. They are a luxury of time. They are textural. The Internet doesn’t give the same emotional experience. And in a good magazine the advertising supports the reader’s experience.”
That isn’t to say that the Newsweek plan won’t also focus on the Internet. Looking ahead to the next five years, Ascheim said, “I don’t see a decline in the magazine economically, but the internet will grow faster.”
Small changes won’t solve the problems that have spread across the industry in recent years, but Ascheim focuses on the opportunities created in that climate. “Newsweek knows that now is the time to reinvent ourselves and capture a different piece of the market, otherwise our future doesn’t look so bright. That’s motivating,” he said.
Putting the issue in a larger context, Ascheim said, “The cost base for all of these businesses — movies, television, magazines, newspapers — was built on different rate structures.” He went on to say, “At a lower cost structure, it may be just fine. At some point information-driven advertising economics is very efficient, and people will pay a lot for it.” He added, “We need to figure out a way to monetize it more efficiently.”
As Newsweek begins to implement the new plan in 2009, Ascheim said the opinions in the magazine must be substantial, not just provocative, if they are going to aid in the reinvention of the weekly news magazine, “It’s added value that really matters. If it’s just another yeller, not so much.”