Blog Post

Daily Claims 80,000 Paying Subscribers; Majority Opt For Annual Plan

News Corp has stopped stonewalling about The Daily‘s circulation following reports from Bloomberg that the tablet tabloid had 120,000 weekly uniques and from paidContent that nearly two-thirds of those were paying subs. Publisher Greg Clayman now tells AdAge the actual number is 80,000.

The rest are cycling through two-week free trials. Clayman told AdAge about 15 percent “ultimately” end up subscribing. It’s not clear whether that’s the immediate conversion rate from the trial or if that’s based on tracking trial users who eventually subscribe.

The majority are paying $39.99 a year instead of the weekly $.99 rate, according to Clayman, keeping the churn during the first year to more-than-respectable low singles digits.

Doing the math: I used a cautious estimate of 60 percent, or 72,000, at the highest rate — $.99 a week for 52 weeks — for my back-of-the-envelope reckoning last week. That put subscription revenue at about $3.7 million a year. Using these official numbers, that would come to about $4.1 million — less Apple’s take, of course. But the Daily is getting more consistency than currency from an undefined majority.

For discussion’s sake, let’s do the same math with 50,000 annual subs and 30,000 weekly. That would be roughly $2 million plus $1.5 million or $3.5 million. Put another way, that’s a little about $67,000; again, before Apple’s cut. Apple (NSDQ: AAPL) gets 30 percent from most publishers but the Daily may have a better deal.

Another bit of math — factoring in only the $30 million for the initial fiscal year investment, that’s $375 per subscriber.

Circulation is part of the picture. The Daily launched with advertising support and continues to have it although it’s unclear what kind of revenue it represents. It also has some e-commerce revenue. And, of course, it has Rupert Murdoch as an internal champion.

The AdAge story also comes with a chart that shows Daily subscribers crossing the U.S., instead of skewing to the coasts. I’m a little surprised that Clayman and News Corp. (NSDQ: NWS) were surprised about the spread. Early adopters are all over the country, not just on coasts, and the Daily has done a good job editorially of stretching across the country. Also, the tabloid format could have more appeal for those who don’t have anything like it in their own areas.

Not so fast: Being tied to the iPad gave it a big head start in terms of publicity and Apple made sure it got the iTunes spotlight. (Even now it’s in the top 25 grossing iPad apps.) But it’s not going to be able to thrive or even survive on iPad alone. The Android app, initially expected this summer, is on the way, which should help. The Daily got a little boost by adding a Facebook Social news app at f8. (Their current practice of tweeting links that require that app for viewing misses the point about Twitter as a tool.) site, which hosts a good tumblr, needs a refresh from its front-page look with launch video featuring special guests from Apple. (It also needs a new intro video that doesn’t date back to February.) I don’t expect a change in the overall internet philosophy, which is to allow some content sharing but to use the site primarily for marketing app subscriptions. In this age of cross-platform access, as a subscriber I’d like to have a way to check the table of contents on my iPhone and read a few things on the go or mark them to save for those days when I can’t download and read the edition before it’s replaced but I don’t expect that either.

Some people, particularly those who’ve been dismissive of the Daily all along, took last week’s numbers from Bloomberg and my post last week as signs that it was failing. Some on the inside thought it was harsh when I pointed out that if the Daily can’t do better it’s not likely to last.

To be very clear, I don’t think it’s time to write the Daily off. Getting to 120,000 unique weekly users from zero with 80,000 paid and engagement levels of at least 20 minutes a day is no small accomplishment. That’s after dealing with new technology, a ground-floor-up design that continues to evolve and staffing. No one at News Corp. expected it to be profitable this year or next; it’s always been a multi-year plan and it is still very much in start-up mode. (The cynic in me thinks Murdoch would like to keep it running at least through the 2012 elections.)

The first big test will be what happens when the initial wave of annual subs has to renew — and whether the Daily has to provide incentives.

But with a weekly run rate of nearly $500,000 and a threshold of 500,000 subs, the tablet tab is going to have to show not only that it can keep subscribers but that it can grow. And it has to hope that corporate patience holds out.

2 Responses to “Daily Claims 80,000 Paying Subscribers; Majority Opt For Annual Plan”

  1. Donald, 

    Get your head out of the left-wing sand. The liberals are on the coasts, and mainstream, centrist Americans are in the heartland. You grossly overestimate the size and power of the Tea Party right.

    And then there’s your commentary, totally not relevant to the subject of the circulation of The Daily with your comments about the political orientation of The Daily’s editorial slant. If you were commenting about an item on a New York Times online initiative, would you throw in commentary on its obvious left-wing bias? I hardly think so. Your comment shows your left-wing bias, rather than someone in the media industry trying to comment on the article.

    Get serious.

  2. I agree with your indication that The Daily can’t survive without more subs. However, even though Apple is on their second generation tablet, it’s still for early adopters. Early adopters tend to be more open-minded, and don’t want anything to do with giving more money to the organization (News Corp.) intent on destroying the fabric of American civilization with its constant, right-wing extremist cant, misrepresentation of facts, and outright lies. The spread of subscribers across the U.S., rather than focusing on the coasts, is also obvious as the coasts tend to be more centrist and mainstream while the middle of the U.S–thanks in large to the right-wing extremist control of talk/hate radio and cable pseudo-news–tends to be more conservative and extremist.