Rupert Murdoch's media conglomerate is today launching an iPad-only digital news product. Its success or failure will have an immense impact.
News Corp takes leap of faith with The Daily
News Corp's long-awaited iPad-only newspaper is finally expected to be launched today at an event co-hosted with Apple at New York's Guggenheim Museum.
Although The Daily is understood to have cost News Corp less than about US$40 million (Dh146.9m) to develop and will employ a relatively small number of journalists, the digital daily still represents a huge gamble for Rupert Murdoch, the company's chief executive.
Like all big media conglomerates, News Corp must keep moving and growing or it dies. Its traditional broadcasting and newspaper publishing arms are facing increased competition from online media. The digital age is the biggest challenge Mr Murdoch's publishing and broadcasting empire has faced. If the launch of The Daily on the iPad is successful, it will be a spearhead for News Corp's online publishing strategy.
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The newspaper industry will be watching to see whether the strategy will be more successful than Mr Murdoch's attempts to make readers pay for online access to his UK flagship publications The Times and The Sunday Times.
News Corp announced in November that digital versions of the two British newspapers achieved 105,000 sales since their online launch in July. However, only about half these sales are believed to be monthly subscriptions.
It is believed that The Daily will need to achieve 800,000 sales before reaching break-even. This is although Mr Murdoch acknowledges that The Daily is being run on a shoestring. Although the staff level is reported to be about 100, a small number for a daily newspaper, Mr Murdoch is reported to have frequently downplayed even this low staffing level to stress the digitally streamlined nature of the publication.
The Daily "will be like the New York Post. But it will be national", Mr Murdoch is reported to have told journalists in his native Australia. "It will only be seen on tablets. It will only employ 10 journalists - and maybe eight to 10 technicians."
According to the research company Strategy Analytics, Apple sold 14.8 million iPads last year. This would appear to make News Corp's target of 800,000 sales easily achievable. But even though The Daily is priced at only 99 cents a week, sustained sales may be harder to achieve than Mr Murdoch imagines.
A joint launch with Apple may encourage some iPad owners to subscribe to The Daily, but many may be classic early adopters, Apple fans who will try anything recommended by Steve Jobs, Apple's chief executive. Whether they will remain subscribers will depend on whether they find The Daily any more informative than any of the many high-quality free newsfeeds available online.
There are three main hurdles facing The Daily. The first is whether people will bother to read newspapers on tablet computers such as the iPad. A high-priced electronic device is far more vulnerable to damage or theft on a crowded train or subway or in a cafe than is a print newspaper. The Daily will also have to compete with the growing number of free daily newspapers now becoming commonly available to commuters in a growing number of countries. Nor do newspapers need to be charged from the mains the night before reading.
The second hurdle is that the digital newsstand on which The Daily is being displayed is increasingly crowded with products that may be more appealing to many iPad owners. For example, the most popular iPad news publication is the digital version of Wired, a relatively high-brow technology magazine aimed at early adopters. These are precisely the consumers who buy Apple iPads. Whether they will be as loyal to more general news publications such as The Daily remains to be seen.
The third obstacle is the very real possibility that digital newspapers in their current form may soon appear archaic in a world of interactive media. The technology industry has long promised consumers digital publications that will be built around each user's tastes.
The US internet services provider AOL is planning to launch just such a publication. The iPad magazine Editions will allow readers to list their interests and then AOL will search the internet for suitable content. Editions will then fit each individual's content around the Editions template. This type of individualised high-tech application is likely to appeal to Apple's most earnest fans more than a digital version of a more general newspaper.
It may be that Mr Murdoch is backing the wrong horse altogether by trying to sell a newspaper that appears only on an iPad. Although iPad users may develop a taste for interactive magazines such as Editions, news cannot be personalised to anything like the same extent.
News, by definition, is event-driven. For example, someone who had not listed Egypt as an area of interest might well still want to be informed of the events unfolding on the streets of Cairo. If News Corp should attempt to make The Daily an interactive publication, it would effectively change it from being a newspaper and make it a daily magazine.
But Mr Murdoch knows that although he may be backing an outsider, the rewards could be big. A digital newspaper could be distributed around the world instantly each day across the internet. With no printing costs, News Corp would also be able to improve the editorial content of The Daily by increasing its staff.
News Corp is believed to have been pressuring Apple to allow it certain concessions. Those that are understood to be on the table include the way in which News Corp will collect subscriptions for The Daily. It is believed that News Corp wants to collect payment straight from the subscriber's Apple iTunes account. News Corp would also like The Daily to be the first publication to be delivered automatically to a user's iPad.
Of course, the real hurdle to The Daily's sales is its huge cover price. Although Mr Murdoch claims that the The Daily will cost only 99 cents a week, to read it, a prospective subscriber will first have to buy an iPad at a cost ranging from $499 to $829.