Rupert Murdoch, Chairman and Chief Executive Officer News Corporation
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“Simply put, the iPad demands that we completely reimagine our craft,” he said. “The magic of newspapers and blogs is the element of surprise and the deft touch of a good editor.”

 

The Daily, purpose built from the ground up for the iPad at a cost of $US30 million, is the most ambitious attempt yet by a traditional media company to merge the subscription-plus-advertising business model of a print publication with the multimedia and interactivity of the Web.

“There is a growing segment of the population that is educated, and sophisticated, and does not read national print newspapers, or watch television news,” Mr Murdoch said. “But they do consume media.”

The success or failure of The Daily will test consumers’ appetite to pay for online news. The Daily makes money from advertising as well as charging US consumers US99c a week, or $US39.99 a year.

According to Gartner’s Allen Weiner, “The Daily is a manifestation of what can be called the Flipboard revolution. Flipboard, launched in 2010 and listed as an app of the year for iPad, offers a blend of visually striking and relevant content with a significant social overlay. The Daily’s take is to take to create an alchemy that blends Flipboard’s social sensibility, a tablet’s inherent attributes (video, geolocation) and a helping of well crafted of news and information”.

Responding to this development, research house Ovum believes News Corp’s financial muscle is The Daily’s main advantage:

“While The Daily is the venture hogging the spotlight, it is just the latest in a series of fascinating experiments being conducted in-market that are testing what model of device-specific user interface design, aggregated or exclusive content and pricing model are going to work for the tablet and smartphone user. Backed by the New York Times, Washington Post and Gannett, Ongo Digital is betting on a UI-driven aggregation service with a subscription model. Jack Dorsey-backed Flipboard is delivering iPad users a personalized magazine UI based on their Twitter feeds free-to-air.

“What is different however for The Daily is the strategic and financial muscle of News Corp. It has been developed in partnership with Apple and this should secure it a prime location in the iTunes Store. In return, News Corp will be playing by Apple’s rules and processing subscriptions through the In-App Payment functionality and paying a revenue share in the process. The specific terms News Corp have negotiated are unknown, but every other publisher now faces paying 30% of their hard won iOS application subscription revenue to Apple.

“The market The Daily launches into is challenging. Interest will spike at launch but it will be subscriber numbers at the end of 2011 that matter. It faces a universe of free content delivered via Google through the browser, and it faces a growing range of free news applications in the App Store. It will need sustained, heavy promotion and a compelling pricing strategy. However its main strategic advantage may prove to be that its parent has deep pockets, and this is going to buy it time to build an audience and refine its model.”

Rupert Murdoch has made a few missteps in the past, such as when he invested heavily in MySpace and dismissed Facebook as “just the flavor of the month“. Let’s hope this is different.

Source: IT News Africa