24/7 Wall St.

Conde Nast has been one of the most successful magazine publishers over the past several decades. Driven by high-quality journalism, expensive glossy paper and beautiful graphics and photos, its magazines were magnets for advertisers, particularly those who wanted to reach affluent consumers. Its move to digital media seemed successful, at least on the surface.

Now, the publisher is losing money and does not expect to stem losses either this year or next. The publishing industry faces the fact that even a well-heeled and successful publisher cannot hold its own in a world were print products are drowning.

The Wall Street Journal was the first to report the problems. CEO Bob Sauerberg wants to move away from advertising as the primary driver of revenue, which is falling. That is much easier said than done. America’s largest publisher, Time, tried to do the same sort of pivot to digital products and use of its databases to draw businesses who wanted extra intelligence about consumers.

Magazine business models are very close to those of newspapers. Similar problems showed up with publicly traded newspaper chains when they posted their second-quarter numbers. Most suffered drops in revenue of 7% to 10% from the same quarter last year. Newspapers posted a second threat. The price of newsprint has risen as much as 30% due to tariffs on Canadian-produced paper. This makes the closure of some papers nearly inevitable.

Sauerberg’s view of the future is that he can make his top line grow again if he can move away from the traditional magazine business model. Other magazine publishers and newspapers have been down the same path, and the results so far are poor, and getting poorer.