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News Corp's The Daily Is Doomed
rsmiller510 writes "After all of the hype, it was surprising how much The Daily, the new News Corp. iPad daily newspaper, looks like a conventional news magazine. Ultimately, though, it's an old model in a new package and as such will fail."
Unfortunately for News Corp, as VentureBeat reports, it's already invested an astonishing $30 million just to launch this thing, and it will cost another $500,000 a week to keep it going. While Murdoch says the right things about taking the presses and the trucks out of the equation to produce a leaner operation, I'm left wondering how many subscribers and advertisers it will take to make the initial investment back, never mind make it profitable -- especially with Apple taking half of the subscription revenues.
News Corp has a quarterly revenue of around 8 billion dollars but their net income has been steadily declining (duh). To risk a one time cost of thirty million followed by a weekly liability of half a million to save that hemorrhaging is a bit of non issue in my opinion. I think Murdoch could give up one of his twenty yachts and reduce his yacht insurance to offset that if he wanted to pay for The Daily out of pocket.
The Apple comment further mystifies me. While terrible that they should lose so much money to Apple, it does give Apple incentive to see this succeed since it's designed for their product. So consider first how amazing Apple is at promoting products and how terribly backward News Corp has been as of late. It might turn out to be a paltry sum to have Apple selling their product with interest of seeing it succeed.
Regardless, if I've learned one thing from Microsoft and their initial XBox and Zune attempts, it's that a very very wealthy company that wants to shove something down the consumer's maw will not let up until it has turned a profit. The problem is that News Corp has what, eight billion sitting around in cash? Let the blood letting begin with this pin prick!
My work here is dung.
The argument seems to be that people want a proliferation of new sources. Yes I'm sure that's why fox news and CNN and MS nbc all are watched by the same people eager for a proliferation of points of view. Or why readers of Huffpo also hang on the words of powerline blog and littel green footballs. Or how the readers of Hagee and the middle easter armageddonist news sources are widely read in the Slashdot crowd.
People do not channle surf these days. they find a few news aggregators they like, say huffpo, boingboing, andrew sullivan, fark nad slashdot, and then they follow the links one deep from there. But it's the aggregators that they come back too. A well constructued newsmag stands a chance. But if it is no more than the New york times or newsweek then it will also have plenty of competition.
Some drink at the fountain of knowledge. Others just gargle.
Color me shocked that the writer for another website, marketing itself as a "macrosite for news", predicts the failure of another news aggregator.
I saw a TV interview with Murdoch yesterday, and he was trying to say that the most innovative thing about his iPad News service was it's GPS functionality. Supposedly no matter where you take the thing, it will give you news and weather that is relevant to the area that you are at.
We are Dead Stars looking back Up at the Sky
Ok mods will burn me for this... but I think that their move to charge 30% off of the dying news industry might seriously backfire. Consider this:
i) the media industry has friends in high places;
ii) given enough time, they will become desperate and have nothing to lose;
To bet against Steve has been a surefire loss for a long time. But I would never fight against those with friends in high places, desperate, with nothing to lose.
I think it's only a matter of time between the news cycle starts turning all "Apple the subject of antitrust laws?" or the classic "Should Apple be broken up?". Neither AT&T nor IBM nor MS had a good run with the state dept. Perhaps Apple is overstreching a bit too far here; I for one think the backlash isn't worth that 30% cut.
Exactly, the issue isn't that people are unhappy with the online delivery methods that exist, it's that the ones that do exist are free.
Most people will not pay for something they can get for free, even if the pay version is just of moderately higher quality. It has to be much, much higher quality.
Since this is just plain text articles, basically - I don't see many people paying for the service when bookmarks work just as well, even on the iPad.
Judging by his picture, this "Ron Miller" guy should not be posting about tech news, he should be driving his Chevy Nova around 1970's San Francisco solving crimes.
Thank god, there is Ron Miller to tell us what to think and like.
While I am not particularly excited about The Daily specifically, Miller's assertion that "we" (who is "we"??) don't want a paid daily newspaper from a single source is very arrogant and short sighted. Many of us _do_ want a paid daily newspaper from a single source. No, that is not all that "we" read, but "we" like the reliable and consistent quality and even a little predictable bias. It is not the same as Google News. I am not bashing the latter, but to assume that everybody wants the same thing is amazingly naive.
"20-century model" in a "21-century package" is "doomed to fail from the get go". Oh my. Such buzz-filled nonsense makes me sick. A paper book is a 16-century model, and a Kindle is the same but in a "21-century" package. Are they doomed to fail?
Don't like "The Daily" (I personally don't) - OK - don't f*ink read it. But don't pretend you have deep all-encompassing insights about what everybody wants in the "21st century".
I don't have an opinion about whether The Daily is going to make it or not. I've spent maybe 15 minutes looking at it so far (yesterday), and I'm going to give it more of a chance over the next couple of weeks while it's free. My initial thoughts weren't especially positive, but it's the content, not the business model, that didn't impress me. The content looked OK and was arranged decently, but I wasn't especially interested in most of what I saw. I didn't see that it was anything unique that I couldn't find anywhere else. If it continues to feel generic, it's going to die. However, if it dies, it's not going to be because people won't spend $1 a week on it. If content is unique and interesting, I'll easily pony up money for a week of it that's less than the cost of a soft drink these days. Some people won't pay anything, ever, for content. But I think that's shortsighted. SOMEONE has to be paid to produce content. It doesn't just magically appear from the Content Fairy. Just as people have to be paid if you want your grass cut or your hair cut or your plumbing fixed, you have to pay the people who produce content. I don't know what the best model is for paying those people, but the idea that you can forever get content for free isn't logical or reasonable. Content companies are losing money by giving away their material on the web. That is NOT going to continue forever. Anybody who understands business understand it you can't invest massive amounts of money into something not producing a return, especially while your traditional lines of business dry up. Those of us on the web have gotten a free product for years because we've been subsidized by the people who pay for printed and televised versions of the content. That subsidy won't last forever. SOMEONE has to find a way to get content producers paid. To simply declare that the future model is free is shortsighted and is a misunderstanding of what's happened on the web so far.
if/when the paywall goes up, google the url (assuming you heard about the story or were redirected there by someone), and it will most likely let you in. You really gotta hand it to those guys, they want the google traffic, while blocking those that went to their sites in the first place.
Well, the whole reason Murdoch has been paywalling his content is that he claims the ad revenue is so low that a tiny number of paying subscribers brings in more revenue than huge numbers of non-paying readers. So the implication of that is that the majority of the revenue raised will indeed be from the subscription charges, at least that's Murdoch's expectation. I'd imagine that's even more true given that paying subscribers will expect fewer ads than if they were reading the same content for free on the web.
Oh no... it's the future.
Most bloggers generally either regurgitate news from other sources like News Corp properties while adding their own editorial spin on it or simply aggregate news from other sources. So given this, I am not in the least surprised that a blogger would claim that the daily is "doomed".
Here is a news flash for all of you wannabe "journalist" bloggers out there, you will fade into obscurity as the "web' becomes less relevant as a news source when the traditional media jumps on the electronic daily magazine bandwagon. These things are the future
Virgin media launched their magazine first with updating content on the iPad and this "Daily" takes the magazine concept one step further. You have the flashy layout of magazines combined with the dynamic and up to date feel of a website with the production values of the old news papers.
Blogging is the one that is doomed and news print media has been reborn as rich media that is both updated on the fly and persistent for times when the network connection is not there while retaining the production values of a glossy magazine.
Jesus was a compassionate social conservative who called individuals to sin no more.
News Corp has a quarterly revenue of around 8 billion dollars [google.com] but their net income has been steadily declining (duh).
Has it?
From the article titled "News Corp profit doubles despite MySpace charge"
The charge on News Corp’s digital media group came after MySpace cut half its staff and marred otherwise strong results in which rising cable and broadcast television profits more than offset declines in film and digital media.
Net income for the fiscal second quarter more than doubled to $642m, or 24 cents per share, from $254m, or 10 cents, a year earlier, when results included a $500m litigation settlement. Excluding one-offs, adjusted earnings per share rose 16 per cent from 25 cents to 29 cents.
Although I think the rest of your comment is spot on.
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
It does have embedded photo galleries and interactive charts, etc. It even has a service to read the headlines or articles to you automatically.
Which "The Daily" are you reading?
-dZ.
Carol vs. Ghost
I find it a little strange that Rupert Murdoch, who every self-respecting left-leaning individual loathes, would be launching an online-only newspaper exclusively available to Apple users who, in my own experience, are overwhelmingly lefty. It will probably cause some serious cognitive dissonance among liberal Steve Jobs idolizers. "It's on the iPad so I should be excited about it, but it's run by Rupert Murdoch so isn't it just iFoxNews?" (Cue head explosion.)
Ceci n'est pas une sig.
I often wonder how much longer magazines like Asimovs or Analog can last. They still charge $36 a year, even if you order the e-edition. I like the content but if they are not going to give me a rebate, then I might as well order the Paper version (which I can resell later on ebay for ~$10).
I also wonder if Books are doomed. I see amazon is selling The Golden Age of Science Fiction (50 Short Stories + 7 novels), volumes 1-10 for $2 each. Why pay full price for the physical books when I can get the same content downloaded to my Kindle or PC for about the same cost as a 2 candybars?
Information wants to be expensive AND wants to be free. So you have Value vs. Cheap distribution fighting each other.
As a counter example, Charlie Sheen, being rich and famous, could easily get fairly high quality sex for free, and yet he still pays upwards of $20,000 a night for y porn star prostitutes.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
"It might turn out to be a paltry sum to have Apple selling their product with interest of seeing it succeed."
I thought News Corp said Apple was taking 30% cut, not 50%...I know that you were only quoting, but 30% is a LOT less than half.
Even so, I delivered newspapers as a kid...from the time I was 11 til I was 15, I had a newspaper route and made a LOT of money. Why? Because as a paperboy, you are technically an independent carrier, and you have to buy the papers from the publisher -- and you mark them up 100% from your wholesale costs. A $0.50 paper cost me $0.25...
Hell, the markup was good enough that when I took vacations or needed help from another paperboy, I just upped my order to the point that instead of telling the other paperboy my customers (and potentially letting them steal them) -- I just bought enough for EVERYONE in my area and told him to deliver every single home. During subscription times when we would get prizes for signing up the most people -- I realized that I could sign someone up for two weeks, get my $5 bonus per person -- and cancel them when it was over and make even greater profit (I ended up winning two trips to disneyland, deliveryperson of the year, as well as almost $10k worth of cash prizes over the 4 years because of this).
What is the point? 30% is not a lot for these companies to get their media -- and their advertisements into the hands of readers. Even at 50%, which I made as a youth (and trust me, I didn't have the pull Apple does) -- they were making money.
Considering the fact that most of the money in this business comes from advertising -- the only real reason you have to pay at all is that the advertisers want to ensure they are putting their products in front of people that actually buy products...not deadbeats.
The only thing holding me back from buying a subscription to this is that it requires me to have an internet connection when I open the app. Rumor is (maybe confirmed yesterday?) that the next OS is going to allow scheduled / background downloads of content like this...and if that happens, I'll probably front for a couple of week to see how well I like it. So far, it seems like a pretty decent magazine. The photojournalism so far is great and is perfect for the medium. Hell, there were a few things I didn't even realize until the second time around (i.e., a few of the photos were panoramic if you touched it)...I'm a huge fan of the Big Picture, and these photos were similar to the ones there...worth paying for just that alone.
Might be the first paper I've subscribed to in years...
If these guys really believe in capitalism as purported, then it isn't my or any other person's or even Apple's problem for News Corp to make money on anything let alone an iPad app. If these guys really believe in capitalism as purported, News Corp or Murdoch may recognize a demand but have no way to capitalize on it today then it isn't our problem to solve either where both we or Apple should be free to walk away from what News Corp wants to do if they think it is a bad idea or bad deal. Failing to make money is a normal part how capitalism works were laying the blame at the feet of others is not interesting if one really believes in the virtues of capitalism.
But this is something that has always bothered me about Murdoch. Those conservative values are near and dear and paramount and we will beat that drum and sing those praises about them...until those values work against us then it is entirely utterly unfair and not our fault. If it turns out this time the market is working against News Corp, it is a good time for News Corp should rethink their strategy instead of News Corp crying we and Apple rethink ours. It is not our or Apple's problem that News Corps sunk $30M US plus $500k US a week into something where telling us and Apple how wrong we are flies in the face of capitalism.
It's funny you should make that assertion! Too bad it's completely baseless.
From the link I just provided: "77.6 percent of the users found their iPad usage went up after their initial “honeymoon” period."
That doesn't mean *this app* will be successful, but it certainly won't fail for the reason you suggest.
He never said that McDonald's serves gourmet meals.
"Our opponent is an alien starship packed with atomic bombs. We have a protractor."