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Murdoch’s ‘The Daily’ Launches; Subscriptions Will Drive Revenues

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After a change of location and a delay of two weeks, News Corp (NSDQ: NWS). execs finally pulled up the curtain on its “iPad newspaper” The Daily, with an introduction by Rupert Murdoch at the Guggenheim Museum in New York. He took the stage holding an iPad and offered praise for Steve Jobs and “the brilliant” Eddy Cue, who will be standing in for the Apple (NSDQ: AAPL) CEO.

Saying that a new age needed a new kind of newspaper, The Daily will take advantage of everything the iPad offer — and for a much lower cost than an average newspaper. Readers can get The Daily for 14 cents a day. “This not a legacy brand, so we have a license to innovate. We believe The Daily will be the model for how stories are told and consumed.”

News Corp. digital head Jon Miller and The Daily editor Jesse Angelo were up next to offer a preview, showing off photos and video. Miller said that The Daily will offer 100 pages of news — though how much of that will be stories versus photos and videos was unclear — while Angelo noted that there is naturally a high level of interactivity, despite the walled garden around the app.

For example, readers will be able to record voice notes within the app and story subjects about notable personalities will include a quick link to their Twitter feeds. Plus, The Daily will also make use of HTML 5 by pulling pages from the web into the app. Still, this does mean that even though Murdoch talked about a new newspaper for a new age, it will not fully take advantage of what other news outlets have done on the web, such as relying more on sharing links and aggregating. Considering that The Daily plans to generate 100 pages of original content each day — and who has time to consume all that on top of everything else? — that all sounds like a tall order, even for News Corp.

In terms of the content itself, it doesn’t seem that different from what is available everywhere else. The first issue’s cover features a story about the downfall of Egyptian President Hosni Mubarak. The bet here is that while consumers are less and less likely to reach into their pocket for a few quarters to buy a newspaper, they might not care about the 14 cents on their credit card for a copy of an e-newspaper.

Eddy Cue, VP of Internet Services for Apple, was next up. “I’ve been using it for two weeks and I can’t believe they can pack so much in every day,” he said. Users will have two subscription choices: with the one-click system, they can be billled either 99 cents a week or $39.99 for a year’s subscription.

Asked about subscriptions for other periodicals, Cue said that preparations are in the works for extending subscriptions to other publishers. But nothing to say yet on that front.

While Angelo said that The Daily will be able to incorporate breaking news, that’s not the focus. “I don’t want another site that’s constantly updating.”

As for plans to bring The Daily to other tablets, Murdoch said that eventually, the digital newspaper will be available on all of them. “We’ve been quite honest with Apple about that,” Murdoch said. “As the others emerge, we’ll sign on with them. But we believe that this year and last year belongs to Apple. That’s simply a market judgment.”

One big hurdle for The Daily is offering “news discovery” behind a paywall. Cue argued that since the iTunes App store has had 10 billion downloads, that’s proof that users are finding what they want. But when it comes to offering accessible web content for free — through, say, Facebook or Twitter links that have been shared — things get a little murky.

“Technically, the stuff will be mirrored on the web,” Miller said. Angelo added, “Not everything you can do on app, can be done on the web. Yes, text, headlines, pictures, are obviously sharable on the web. But for the touchscreen features, 360 degree photo, people will want to go through the app. While users will be able to access articles that are shared on The Daily’s website, they won’t be able to go beyond an article to access the site without paying.”

Initially, subscriptions will be the main revenue source for The Daily. As I was coming into the press conference, I ran into Christine Cook, the former SVP for digital at Martha Stewart Living Omnimedia (NYSE: MSO). She’s just been named SVP for Ad Sales at The Daily. So advertising will be a part of The Daily. But as Miller said, not a big part at this point.

That said, advertising is going to be seen all over the e-newspaper. Medialets has been chosen to serve as the mobile rich media ad platform. Among launch sponsors are Verizon — which is covering the two-week free trial subscriptions — along with Macy’s, Pepsi, HBO, Paramount Pictures, Virgin Atlantic and Land Rover.

“At some point, we’ll get to a 50/50 level in terms of the contributions made by subscriptions and advertising,” Miller told the audience. But for right now, it’s a mostly subscription-based model.”

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