Despite her current woes, no one really expects Brown to leave The New Yorker. Newhouse can't afford not to renew her contract. To dump Brown now, amid all the bad financial news, would be an acknowledgment that he picked wrong in 1992.
Nor is Brown likely to quit. She was reportedly offered a job producing a weeknight version of 60 Minutes, but there are no signs that she's interested. She has too much pride to surrender in the middle of the battle. As an old friend of hers puts it, "She would only quit if she could quit in triumph, with everyone acknowledging that it is the best magazine in the world and that she is the best editor and with the magazine in the black."
"In the black"--that is the real key to understanding what's going on at Brown's magazine. The New Yorker that Newhouse bought in 1985 was profitable. But having shelled out $168 million for the magazine, Newhouse was not satisfied with the measly $5 million a year it was earning. He set out to impose the Condé Nast model on The New Yorker: expand circulation and raise ad rates.
The move to Condé Nastify the magazine worked, sort of. The New Yorker began offering. Brown did her job: producing buzz to fuel circulation. The number of subscribers soared from about 450,000 in the mid-'80s to around 800,000. The magazine hiked ad rates accordingly, pricing quirky advertisers out of the magazine in favor of big national ones. Ad revenue increased but not enough to cover enormous new costs: Recruiting new subscribers by direct mail, printing more magazines, and mailing more magazines are tremendously expensive operations.
Brown and Newhouse's New Yorker is squeezed between newsweeklies and glossy monthlies. The market for general-interest weekly magazines has long since dried up: Look and the Saturday Evening Post are dead. Brown has tried to remake The New Yorker as an upscale newsweekly, but its 800,000 paying readers can't match the 4 million that Time offers its advertisers. The magazine can't compete with monthlies either. Vanity Fair and its advertisements have a full 30 days to be seen by readers. The New Yorker has a seven day window.
The New Yorker has fought back with special issues--massive tomes about race or Hollywood or the future. In 1997, its six double issues and three other special issues accounted for 35 percent of the magazine's advertising pages, according to Advertising Age. The double issues save The New Yorker postage and printing costs, and their advertisements have 14 days to reach readers.
But the magazine is still losing money, and Brown seems trapped. She has staked her career on profitability. The New Yorker could probably make money as a bimonthly or monthly (ideas that have reportedly been floated within Condé Nast). But Brown and Newhouse probably would not accept that tarnish on their reputations: They don't want to be the cretins who killed America's last great weekly. The magazine could also break even by raising subscription prices and shrinking the number of subscribers. That too would look terrible on Brown's CV.
Brown has always had an outsized ambition, and now she is imprisoned by it. She and Newhouse have traded a small, weird, profitable magazine for a big, flashy, unprofitable one. And now they don't seem to know what to do with it.