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On Friday I was down in Tampa trying to sell my book, iPhone Millionaire, on the Home Shopping Network.
Yesterday, Newsweek announced that they were terminating the print version of the magazine.
What do these two things have to do with each other?
A lot, actually.
Let’s start with Home Shopping Network (HSN).
Who watches it?
The tell me their Prime Time is between midnight and 1am.
They get about the same numbers, I think, as a mid tier cable channel.
But let’s compare the two.
A mid tier cable channel generates about $15 million in income from advertising in a year.
Home Shopping Network generates (ready?) Â about $9 billion in revenue from the same size audience.
Isn’t THAT an impressive number?
It makes you wonder why the other cable channels even bother with all the expense and difficulty of producing programming, trying to get an audience’s attention and then selling spots to advertisers in the rather tortuous and Rube Goldberg-like construct that, having seen the ad, they will then go out, get in their cars, drive to the store and buy the stuff that is being adversited. Â What are the odds on that? Â What percentage of people who see an ad actually buy the stuff? Â Could it be close to .001%? Â I bet it is. Â On the other hand, what percente of people watching HSN actually pick up the phone (or buy online) the stuff they are seeing? Is it close to 70%? I bet it is.
Which is the better business?
Which reminds me, HSN.com alone did an astonishing $1 billion in revenueevery quarter last year.
Which takes us to Newsweek.
Newsweek was once a great magazine.
Once being the operative adjective.
Today, Newsweek is a sad shadow of itself.
The staple is often thicker than the magazine. Â (I read it every week because I fly like 3 times a week).
The content has actually improved, but if there are no ads (and there aren’t any) there is no magazine.
So Tina Brown is going to fold Newsweek into that other iPad based non-performer, The Daily.
Two failures for the price of one.
And why are they failing?
Becasue they don’t have any revnue.
Advertising revenue.
As Facebook has so clearly shown, advertising doesn’t work on the web. Â Who wants to look at it? Who cares?
But buying stuff?
On the web or on cable.
That works.
Clearly.
Maybe Newsweek should take a lesson from HSN?
They should.
But they won’t.
It’s not in their DNA.
They like advertising.
Unlike pretty much all of their readers.
