When Rupert Murdoch's iPad-only newspaper launched early last year, many people predicted it was not long for this world.
This was in part because of the massive amount of money News Corp. was pouring into the project--the word was that 'The Daily' had a $60 million annual budget--and in part because of skepticism that readers really wanted to pay $1 a week ($40 a year) for yet another generalist magazine/newspaper when the world is now completely awash in news.
(In case you were wondering, the hand-wringing about the "death of journalism" a few years ago has turned out to be a laughable concept promulgated by a handful of old-line newspaper moguls who were distressed that their fortunes and influence were getting flushed down the drain. There is vastly more journalism now--professional and amateur--than there was even a decade ago, and, consequently, the world is vastly better informed. Meanwhile, the mountainous profits still generated by the TV news business, along with the ongoing survival of most newspapers and magazines and the launch of hundreds of new news startups along with blogs and social media have unleashed a veritable flood of real-time news-gathering and story-telling upon the world. The problem for those in the news business, in fact, is that there is too much news, not too little. So the idea that lots of people would be willing to pay for yet another source of maybe-nice-to-have-but-certainly-not-must-have content always seemed dreamy.)
But "The Daily" did have some success: As of last October, it was said to have 80,000 paying subscribers, along with another 40,000 signed up for a free trial.
Assuming those 80,000 were all paying full freight, they would have been generating annual subscription revenue of $3.2 million. Throw in another couple of million for ads (maybe more, given the power of the News Corp. sales force), and "The Daily" might have had a run-rate of about $5-$10 million of revenue.
Of course, if the $60-million-budget number is accurate, that would also leave News Corp. hosing away $50-$55 million a year.
And that's a lot of money.
So it's no surprise to hear that Rupert Murdoch may now be considering pulling the plug.
Kat Stoeffel at the New York Observer reports that "there are internal rumors that The Daily has been put 'on watch.' According to a source the status of the groundbreaking iPad tabloid—which loses $30 million a year—will be reassessed after the November 6 election."
(So maybe it's only $30 million.)
So, what are the larger lessons here?
First, News Corp. was smart to try this. If it ends up losing, say, $100 million on "The Daily," it will only have lost a couple of months-worth of FOX NEWS's profits. The company can totally afford that. And if it hadn't tried this, it never would have known.
Second, creating another generalist publication in a world awash in content is difficult, especially when you limit yourself to one major distribution platform (in this case, the iPad), and especially when you ask readers to pay for it.
Third, despite reports to the contrary, the web is not dead. In fact, the web--the cloud--is now the center of the information world, the ubiquitous source that powers billions of computers, gadgets, and apps around the globe. In a web-centric world, confining an information product to one platform means cutting yourself off from the vast majority of the market. It also means forcing your readers to interact with you on only one of the many platforms that they likely use in a given day.
Fourth, the news business is alive and well: The real reason "The Daily" has had a tough time gaining traction is not that it's a bad publication (It isn't--it has produced some excellent work). It's that it is but one of hundreds of publications that are essentially trying to do exactly the same thing. And the world just doesn't need another one of those publications, at least not one that readers have to pay for.
So, if the rumors are true, this may be the end of "The Daily."
But there's no shame in that.
Most new ventures fail.
And this one was a very worthwhile experiment.
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