THE BEST MAGAZINES: 'NEWSWEEK' SHINES IN FIERCE SEGMENT WEEKLY STANDS OUT AS SUCCESS DESPITE KLEIN- AFFAIR FALLOUT

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In the late 1980s, publishing pundits portrayed weekly newsmagazines as an endangered species, destined to become extinct in an age of instant information and news on demand.

Of the category's Big 3, News-week was seen as the most vulnerable. Time was-and is-the flagship of the world's largest media company, Time Warner, while U.S. News & World Report had carved out a comfortable corner of the category with its news-you-can-use positioning.

As the '90s wind down, the pundits are gnawing on their own words. Not only is the category alive and well, but the Washington Post Co.'s scrappy weekly is currently leading the pack. Newsweek last year won the category ad-page crown for the first time in nine years.

HAS THE BUZZ

The business-side success appears to validate a positive industry buzz about Newsweek's editorial product in recent years. The magazine in 1993 won a National Magazine Award for general excellence and was a finalist for the honor last year.

The continued strength of Newsweek's editorial product-and the business-side payoff-boosted the weekly to a spot on Advertising Age's Best Magazines list for 1996. It made the cut despite a journalistic stumble embarrassing enough to have disqualified lesser titles.

The Joe Klein affair-in which Newsweek's editor knowingly published false information to protect Mr. Klein's anonymity as the author of the novel "Primary Colors"-gave the magazine a black eye, but has done no lasting damage to credibility.

"There was no question that we screwed up," says President and Editor in Chief Richard M. Smith, "and if there had been an unwillingness to acknowledge a mistake or the mistake had been part of a bigger pattern of editorial problems . . . it would have been extremely damaging."

STRONG TEAM

That Newsweek emerged relatively unscathed is testament to the powers of the team that has been leading the newsweekly for most of this decade.

Mr. Smith was elevated to president in 1991, turning over day-to-day editorial control to longtime Editor Maynard Parker. At the same time, Harold Shain became exec VP-general manager, from senior VP-circulation; he added the title of U.S. publisher in 1993. The fourth member, Gregory Osberg, joined the sales staff in 1990 and is now associate publisher and VP-advertising.

On both the editorial and business sides, the magazine has pursued a long-term strategy. As a result, Messrs. Shain and Osberg say they weren't frustrated when ad-page success trailed editorial recognition.

By any measure, 1996 was a good year for Newsweek. Operating income rose 52% to $22.8 million on revenue of $377.1 million. Ad pages increased a healthy 10.2% to a category-leading 2,533. Circulation jumped 1.6% to 3.2 million in the first half, vs. the previous-year period, and 1.4% in the second half.

By comparison, Time posted a 3% increase in pages to 2,393, and a 0.9% circulation gain to 4.1 million through June 1996. U.S. News saw a 4% decline in pages to 2,084, and a 1% increase in circulation to 2.3 million in the first half.

Newsweek is aggressive on price, according to buyers. But it also has focused on selling the category's strengths.

"Greg [Osberg] has spent a lot of time working on [convincing us to] use the category against early evening and network broadcast news programming," says Jack Klues, senior VP-director of worldwide media services, Leo Burnett USA, Chicago. "Those kinds of moves are what has rejuvenated the category."

Mr. Osberg says Newsweek has focused on taking the lead in four ad categories: automotive; finance; technology; and pharmaceuticals. Last year it led in every category but finance, where it was second to U.S. News, he says.

Editorially, Newsweek has broadened the traditional mandate of a newsweekly, devoting significant resources to such areas as science, health, money, technology and parenting. Editors are prouder of a cover story from a year ago exploring "Your Child's Brain" than they are of their coverage of the presidential election or Summer Olympics.

"We first want to cover the harder news area . . . [but] we probably ran more back of the book covers than normally last year," Mr. Parker says. "I define news in a very broad sense."

LOADED WITH HEAVY HITTERS

Newsweek also packs a lot of heavy hitters onto its masthead, including Senior Editors Jonathan Alter, Steven Levy and Sharon Begley and Contributing Editor Frank Deford.

The role Newsweek's popular upfront section has played in the magazine's success can't be overlooked. The "Periscope," "Cyberscope," "My Turn" and "Perspectives" pages "give the magazine an identity, they set a tone," Mr. Parker says. New for '97 is a weekly "Millennium Notebook" page.

Mr. Smith says the category is no longer in danger of becoming irrelevant. By adapting on both the editorial and business sides, he says, "We have moved from being a digest of the week's news to being an intelligent guide to help people

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