On February 2, 2011, Rupert Murdoch's News Corp. launched The Daily, the first newspaper designed exclusively for the iPad.
While a number of major newspapers, including the New York Times and the Wall Street Journal, have iPad apps, The Daily marks the first iPad publication without a print counterpart, and also the debut of Apple’s new subscription pricing model.
Print newspaper circulation and ad revenues continue to decline
The Daily arrives at a time when even the titans of the print newspaper world continue to struggle with declining circulation and ad revenues. An article by Mashable’s Lauren Indvik reports that the New York Times reported a decline of 2.9% in overall revenue for the fourth quarter of 2010, with overall profit declining 26%.
While the Times’ digital advertising revenue increased by 11.1%, print advertising revenue declined by 7.2%, while circulation revenue dropped by 3.6%.
The Times is far from the only old-line newspaper to experience such troubles. While Bloomberg Businessweek noted in an October 25, 2010 report that circulation declines slowed somewhat between April and September 2010 from the preceding six months (5 percent as opposed to 8.7 percent), the readership for print continues to erode as online methods for reading the news have gained in strength.
Free online content has made it tough for online newspapers to become profitable
But greater online availability of news hasn’t lead to greater profitability for newspaper publishers, because most papers’ web sites make their content available for free. The main source of revenue has come from online advertising, and the growth shown by the New York Times’ online ad revenues is in line with online newspapers as a whole.
The Newspaper Association of America, citing data from comScore, states that online advertising revenues for newspapers grew by 11% between the third quarter of 2009 and the third quarter of 2010. But as Erik Sass notes in his MediaPost article on the NAA figures, “newspapers’ huge online audience-- perhaps the largest of any traditional media-- has failed to generate sufficient revenues to offset print declines.”
The Wall Street Journal's success with paid online subscriptions is an exception to the rule
For this reason, many publications are considering methods of restricting online content to paid subscribers. The Wall Street Journal was in the forefront of this business model, and has the largest paid subscription numbers of any online paper, claiming 414,000 subscribers as of March 2010.
But the WSJ’s model is unique because of its large business readership; its $155-a-year online subscription price would have some difficulties if applied to the average mass-market daily. (Journalist Mark Potts notes in a blog entry on the WSJ’s paywall that the subscription price is a tax write-off for much of the paper’s readership.)
The WSJ has also tried to use reduced online subscription prices as a means of increasing print circulation, bundling the two for $99. But while the New York Times’ Joseph Plambeck attributes the WSJ’s 0.5% subscription increase from October 2009-March 2010 to its online subscriptions, the figures don’t break down how many people paid for the dual subscription offer, and if it actually boosted print circulation.
The Times itself is planning to re-introduce a paid content feature, something it tried previously and abandoned in September 2007. Originally, it was to debut in January 2011, but the Times has yet to finalize how it will work. But the question remains how many users accustomed to free online content will be willing to pay for an online newspaper.
The Daily offers a cheaper subscription plan, but there are already challenges
The Daily provides a potential test not only for this idea, but also for the new Apple subscription model. Users will pay 99 cents a week for The Daily, averaging out to 14 cents an issue, or can purchase an annual subscription for $39.99. News Corp. predicts the bulk of revenues will initially come from subscriptions, with ad sales later growing to the point where revenue will be split evenly between the two.
But challenges to The Daily’s model have already emerged. Shortly after the launch, programmer Andy Baio and his friend Rex Sorgatz noticed that all The Daily’s content was available on web pages, just without an index, and created a Tumblr blog called The Daily: Indexed to provide easy access to the content. This not only breaks the restriction of only being able to view The Daily on the iPad, but also threatens the paid subscription plan as well.
However, since Baio’s blog simply presents links to the articles unadorned by The Daily’s iPad interface, it could be argued that it poses little threat. The app itself is as much a part of Murdoch’s business plan as the content.
Initial reviews of The Daily have criticized its speed and stability
Not all reviews of that interface have been enthusiastic. The Telegraph’s Shane Richmond called it “a complete failure of imagination” that doesn’t offer a native iPad experience, while PC World’s Jeffrey L. Wilson praised the interface but noted the app was prone to frequent crashes.
A common theme running through the reviews (as quoted in Media Life’s roundup) is that The Daily doesn’t differ much from existing iPad newsmagazines, apart from offering original content that isn’t available in print. But since The Daily is still a work in progress, its issues with sluggish loading and crashing will no doubt be addressed in future updates.
But it remains an open question whether The Daily will cure the woes of the newspaper industry. As print declines, newspaper publishers will have to develop successful Internet business models, and the tablet market offers a great deal of promise. But whether that promise is realized depends on newspapers’ ability to provide innovative methods for reading the news and giving readers a reason to pay for content.
Paul Brown - Paul Ferrell Brown graduated from the College of William and Mary in 1994 with a B.A. in English literature, and completed his M.A. in ...
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