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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.
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.
The same thing happened to an old technology called "radio". It's biggest problem was that content produces had no way to bill their listeners. Once they bought a "radio set" they could consume all the free content they wanted!
Sure, it enjoyed a huge boom in the 1920's, but By the 1940's, all the money dried up and radio became a distant memory.
If my memory serves me correctly, a similar technology called "television" met the same fate in the 1960's -- To be fair, it never really stood a chance with its short-sighted "give all the content away for free" business model.
Obscure, I know, but you can find information about them on the web ... for now ...
Required reading for internet skeptics
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.