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Why the Daily failed: A postmortem

December 04, 2012|By Dawn C. Chmielewski
  • As part of a major restructuring initiative at News Corp., the Daily -- the first iPad-only newspaper -- will cease publication Dec. 15.
As part of a major restructuring initiative at News Corp., the Daily -- the… (Photo by Spencer Platt /…)

The untimely death of the Daily illustrates the perils of the app economy.

News Corp.'s national news publication -- the first designed for tablets and smartphones -- ranks among the top-grossing news applications for Apple Inc.'s iPad, just behind the New York Times, the Economist and News Corp.'s own New York Post, according to researcher AppData.

Nonetheless, News Corp. said Monday it would cease stand-alone publication of the Daily on Dec. 15, with technology and other assets (including some staff) to be folded into its Post.

"The Daily was a bold experiment in digital publishing," News Corp. Chief Executive Rupert Murdoch said in a statement. "Unfortunately, our experience was that we could not find a large enough audience quickly enough to convince us the business model was sustainable in the long term."

The Daily, which was launched to great fanfare in February 2011, was a victim of the digital economy.  Murdoch staffed the publication with marquee editors and journalists, the way a glossy magazine might, to attract new readers. News Corp. invested an estimated $80 million in hopes of luring young, digitally savvy subscribers.

But the app economy couldn't support such editorial largesse, said Cameron Yuill, chief executive of AdGent Digital, a digital media company.

News Corp. has never publicly revealed how many people paid 99 cents a week (or $40 a year) to read the Daily. But in an email to the staff in July, editor in chief Jesse Angelo said it attracted more than 100,000 subscribers.

That would net roughly $4 million in annual revenue -- minus Apple's 30% fee. That's hardly enough to support the Daily's staff of 120 people, many of whom were dedicated to writing and editing original content, said Yuill. 

The Daily might have stood a better chance of survival if it instead drew from the reporting resources of News Corp., with its global broadcast and newspaper holdings, Yuill said. That would have substantially lowered the app-based publication's overhead.

Murdoch's experiment was one of the few digital ventures that didn't reuse stories that first appeared in other outlets. It failed to learn from the success of the Huffington Post, which mixes original reporting with comment, or draw from the wealth of content it was producing at the Wall Street Journal, the Times of London, the Post and even its Fox News Channel.

"If you were trying to launch a news app in the digital world, the model has been proven," Yuill said. "At the end of the day, the model is there for anyone who’s trying to produce content, produce it as cheaply as possible, and distribute it as widely as you can."

Other media analysts said the Daily was hobbled by a more fundamental problem: it devoted resources to creating a publication that took advantage of the iPad's ability to display vivid pictures, video and animation. But the writing failed to match the visual sizzle.

"We have to give it high marks for effort and for some of its technology," said Alan D. Mutter, a San Francisco media consultant. "The biggest problem with the Daily is that it never had a coherent editorial voice ... content still matters."

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