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Another Major Blow to Palm Coast Data as Newsweek, a Major Account, Ends Print

| October 18, 2012

Newsweek has been trying hard to stay relevant in the Internet age, but its print runs can only reach so far.

A little less than two years ago–in January 2011–Palm Coast Data announced a rare bit of great news: Newsweek had signed on with the company to take care of its subscription fulfillment. It was a major victory for the struggling company, once Palm Coast’s largest private employer, whose revenue has fallen by more than half in the last four years, mainly because it has been hemorrhaging business as magazines have either lost circulation or ended their print runs altogether. Many have moved to web-only editions. Many have gone out of business.

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Newsweek, the second-largest newsweekly in the United States (after Time) brought what was left of its subscribers (1.5 million, down from 3.2 million in 2001) to Palm Coast Data. “We look forward to providing Newsweek the very best in e-commerce innovation, traditional fulfillment services and, of course, value as we prepare for a long-standing relationship,” said Palm Coast Data’s Mike Taschler, the company’s executive vice president at the time. Taschler stepped down nine months later. And the relationship with Newsweek lasted all of two years.

In 2010, Tina Brown, who founded the Daily Beast website, and Sidney Harman, the auto magnate, acquired Newsweek from the Washington Post for $1. Brown merged it with the Daily Beast.

Today, Brown announced that the Dec. 31 issue will mark Newsweek’s last print edition, after 79 years in print.

“It cost $42 million a year to print, manufacture, distribute, manage the circulation of Newsweek, before you’ve even hired one writer, or one intern,” Brown said in a conversation on Beast TV (see the video below). A chunk of that $42 million went to Palm Coast Data to manage the circulation. “That’s an enormous albatross. It’s the truth. And we felt that the more important choice was to protect the journalism, to protect the content, to protect the photography, the ideas, the marketplace of ideas. That’s really where we wanted our focus to go, as opposed to the constant battle with the bricks and mortar aspect of that business.”

Earlier this month the the Pew Research Center’s latest study on news consumption found that “the proportion of Americans who read news on a printed page – in newspapers and magazines – continues to decline, even as online readership has offset some of these losses. Just 23 percent say they read a print newspaper yesterday, down only slightly since 2010 (26 percent), but off by about half since 2000 (47 percent). The decline of print on paper spans beyond just newspapers. The proportion reading a magazine in print yesterday has declined over the same period (26 percent in 2000, 18 percent today).”

Circulation of local newspapers has suffered, declining more than 20 percent since the middle of the last decade, and forcing close to 200 newspapers to end free access to their websites and put up so-called pay walls that require readers to have paid subscriptions, or face blank screens. The Daytona Beach News-Journal just adopted such a pay wall, mostly to preserve its base of print subscribers.

Employment at Palm Coast data peaked in 2008 at just over 1,000. The company has refused to disclose its employment numbers since. It has gone through several rounds of layoffs, and has been working on adapting new business models, including in digital media. The end of Newsweek’s print edition doesn’t necessarily mean the end of its relationship with Palm Coast Data, since the 2011 agreement included, according to the company, ” front-end processing, email and telephone customer service, Internet services, mailing services and detailed reporting.” The internet services were not specified, but given the Daily Beast’s broadening emphasis on the web, those opportunities, while significantly scaled back from the benefits of a print edition, would be Palm Coast Data’s.

So Brown’s statement today is double-edged for Palm Coast Data: “It is important that we underscore what this digital transition means and, as importantly, what it does not. We are transitioning Newsweek, not saying goodbye to it. We remain committed to Newsweek and to the journalism that it represents. This decision is not about the quality of the brand or the journalism—that is as powerful as ever. It is about the challenging economics of print publishing and distribution.

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17 Responses for “Another Major Blow to Palm Coast Data as Newsweek, a Major Account, Ends Print”

  1. Bronx Guy says:

    The way Palm Coast Data is going, the city may be able to return to its former offices, thereby obviating the need for that 20 million dollar Taj Mahal in Town Center.

  2. DWFerg says:

    A classic example of poor EconomicDevelopment of packaged, initiative tax concessions , betting on a “clean” industry that is on a “dying” unsustainable trajectory !—Not to throw our esteemed politicians under the bus, most were not in place @ the time PCData was granted such privileges, but underscores the decision to give them the old City Hall complex that has enraged current Taxpayers in their revoly to block the plan to build another center of Government( their frame of reference is the Taj Mahal , GSB on 100 that is often derided as a monument not a practical center for performance/ convenience of Government Services. All the more reason to have experienced Economic Development people in place that can catalyze Flagler county into a community that takes care of its Senior citizens, retirees(and Snowbirds) but more importantly, focuses on building a superior place to settle, find a good job, marry and raise a family !!!!This will ease our strained tax base, attract new commercial investment, and make Flagler the envy of the state of Florida, the Southeast and the Nation if successful -We have the cards, but we must play them differently in the future, adapt to the current economic realities, the New Normal if you will, and make bold new steps to achieve this ambitious goal- It can be done, but not using the same old tired formula of Palm Coast 1.0

  3. Peggy Ellis says:

    Newsweek is my favorite news magazine. I will miss reading an actual copy.

  4. Geezer says:

    Anybody like Chopin?

    How about the Funeral March?

    Smile as you go under, PCD.

  5. Clint says:

    I guess The Publisher Clearinghouse will lose another magazine subscription option. Oh well, makes no difference to me, I got a letter from them yesterday that said I won 10 million dollars. I’ll be lighting cigars with hundred dollar bills come January !

  6. AloeVera says:

    Maybe PCD will get another loan from the state. Somehow they keep chugging along. WHAT IS SMELLING LIKE ROTTEN FISH is that the employees are receiving notice the their retirement accounts will be merged INTO the AMREP Corporation Savings & Salary Deferral Plan AND IT IS NOT FDIC INSURED!!!!!!!!!!!!!!!!! PCD no longer matches contributions. I hope ALL employees take the time to READ. this. This just doesn’t seem right. Well, nothing with this company is right anyway, but they continue to succeed somehow

  7. costablue says:

    Agree with you DWFerg 100%, but we desperately need some YOUNG, NEW, BLOOD with a vision in control — not these tired yahoos!! We have a beautiful city/county, nice parks and great schools but there are no jobs to keep the decent people around! Otherwise, this could be a wonderful place to raise a family but we need good, high paying jobs!

  8. Wait What? says:

    AloeVera, talk about fishy? I heard they hired back the receptionist whose “job was eliminated”. Maybe they should rehire EVERYONE whose “job was eliminated”. How do you lose a major client, then add back a position you didn’t need? If they had a job opening, they should have recalled a person with a family to feed.

    • Hbeach3rjm says:

      The receptionist was not rehired it is now a recording that answers. so how about you understand not everything you hear it true so dont always believe it and then start talking about it like you know. im am not being rude just dont talk about something you dont know because if you worked there you would then understand

  9. Palmcoaster30 says:

    This is bound to happen to each print subscription at some point. It costs 40 million dollars a year to produce a weekly magazine, so i read online. However, the bad part for Newsweek is that Palm Coast Data cannot really support digital subscriptions as nobody knows anything about it, from the client reps down to the customer service reps. There is a manager in customer service that just does not know how to handle the new digital world and she cant seem to pull it together and better organize this before we lose other titles. However, they have now promoted a young man id say age 22 to be a supervisor over the “digital” people, in which he knows the bare basics. Good luck Palm Coast Data entering into the digital age, especially with the staff that you currently have, a word of advice push retirement on them before it costs the company more losses.

  10. Wait What? says:

    Hbeach3rjm, I work there. She is back at the front desk. Why don’t you try calling there after 9am and see for yourself.

  11. audra says:

    she is back, but part time, that way they don’t have to pay benefits to her. This is a fact and not a rumor. Nice that her job was automated not they need her back, just amazing

  12. Crows says:

    just heard Limbaugh Letter is going digital the end of December, it was on this morning’s show

  13. teach31 says:

    I also work there and the comment that “palmcoaster30” made is not entirely true. The things that people have to remember is that palm coast data is a fullfillment house, they can only do as much as they are paid to do. So, if a publisher like newsweek decides to go digital without notice to anyone, of course people arent sure how to handle that without time to prepare. The management staff in customer service does the best job they can do with what they have. Digital is a new age for people, everywhere and it costs alot of money and time to upgrade systems and become familiar with the every change. So before judgement is set out for the “manager” please understand everything is limited to what we can do there. We give credit when credit is deserved for the hardwork and aggravation that comes along with the job.

  14. PCD_is_a_dump says:

    Palm Coast Data is bound to go under. They have terrible management who hire “managers” from off the street with no experience in any of the systems that PCD uses weather it be running reports or even how to talk to the employees that have been there for a long time. It is a terrible company to work for because of that its the blind leading the blind and don’t tell anyone there you have an education because it will only be bad for you in the end because they will just hire someone without an education to replace you just because you have an education and they are afraid you will fix what is broken.

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