News Corp. Chief Executive Rupert Murdoch is embarking on an ambitious plan for a new national digital newspaper to be distributed exclusively as paid content for tablet computers such as Apple Inc.'s iPad and mobile phones.
The initiative, which would directly compete with the New York Times, USA Today and other national publications, is the latest attempt by a major media organization to harness sexy new devices to reach readers who increasingly consume their news on the go. The development underscores how the iPad is transforming the reading habits of consumers much like the iPod changed how people listen to music.
"We'll have young people reading newspapers," the 79-year-old Murdoch said during the company's Aug. 4 earnings call. "It's a real game changer in the presentation of news."
Unlike News Corp.'s business-centric Wall Street Journal, the new digital newspaper would target a more general readership, offering short, snappy stories that could be digested quickly. The newsroom would operate under the auspices of Murdoch's New York Post and be overseen by its managing editor, Jesse Angelo. News Corp. has yet to set a launch date, although people familiar with the matter said the news organization would like it to debut by year's end.
Although it would draw the reporting resources of the Post and Dow Jones, Murdoch could potentially invest millions of dollars to staff the operation and charge a yet-to-be determined subscription fee. One person familiar with the plan said News Corp. envisions a staff of several dozen reporters and editors and that the budget has not yet been determined.
The digital publication would be available as an application for the iPad and other devices.
As print advertising flees to the Web, news organizations are scrambling to prop up their bottom lines with new sources of revenue.
"Newspapers are looking at this as another lifeline to survive," said Edward J. Atorino, a media analyst with the Benchmark Co.
Murdoch has been increasingly focused on building readership and revenue on digital platforms, erecting a pay wall around the Times of London and announcing plans to charge for access to News Corp.'s other newspaper websites. The media giant offers the Wall Street Journal on the iPad for a $4 weekly subscription fee.
The iPad launched in April with a built-in reading application that connects to Apple's electronic bookstore, which contains tens of thousands of titles from five major book publishers. A handful of newspapers and magazines — including Wired, Popular Science and the New York Times — had iPad-ready apps waiting when the device hit shelves. Since then, those tablet-based editions have been widely praised for their readability — and have attracted the attention of advertisers who are increasingly looking to digital devices as the number of print readers wanes.
The initial success of the iPad has attracted other hardware makers hoping to capture a piece of the tablet market, which San Jose technology research firm Gartner Inc. believes could lead to the sales of 10.5 million devices by the end of this year.
The New York Times said its free, advertising-supported application for the iPad has been downloaded more than 400,000 times. The newspaper is preparing to introduce a paid version as it moves forward with plans to charge for online access to its news next year. Growth in digital revenue has helped offset a decline in traditional print advertising, the newspaper said during last month's earnings call.
Alan D. Mutter, a media and technology consultant, said it remains to be seen whether Apple's iPad will allow old-line print publications to reach new, younger readers. Preliminary research shows that newspapers attract readers 40 and older regardless of how the news is disseminated.
"Newspaper content tends to attract — whether on print or on an iPad or however — mostly the same kind of readers," Mutter said. "Not necessarily younger readers."
David Sarno contributed to this report