What's really new about "The Daily?" Certainly not the 360 degree photographs you can pan and tilt. The carousel of story pages resembles Coverflow on iTunes. If innovative user interfaces are your thing, The Daily will leave you cold. On Twitter, after the launch event, Dave Winer suggested that it was "time for a nap".
Before you nod off, however, let's consider what's really interesting about The Daily. Namely, its price. For $1 a week, or $40 a year, US-based iPad users are being promised 100 pages of original editorial content every day.
This price point lays down a marker for both USA Today and The New York Times, both of which give away their iPad apps for free, but may soon start to charge. With its heavy emphasis on features, The Daily also asks questions of magazine and book publishers whose tablet offerings cost more than their print equivalents.*
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*The suspicion remains that Murdoch's reverence for the 'deft touch of a good editor' is an excuse to build a walled garden that restricts our desire for free-range consumption.*Yesterday, Murdoch waded into this unruly thicket of price points, driving signposts into the ground that point the way to mainstream adoption. It was a classic market-making move.
On the verge of his 80th birthday, the sight of Murdoch in full flow remains oddly impressive. At Wednesday's launch event, Murdoch trumpeted The Daily's pure-play advantages: "No paper, no multi-million dollar presses, no trucks. And we're passing on these savings to the reader, which is why we can offer The Daily for just 14 cents a day."
All of this is true, but there's something else he didn't mention: the absence of parallel production lines for print, web and apps at The Daily. At established news organizations, this diminishes the attention paid to digital output and results in costs that always seem to rise. At Wapping in 1986, Murdoch jettisoned a legacy that was holding the newspaper industry back. No doubt he views The Daily in similar terms.
The official line is that The Daily is aimed at the "15 million Americans who will own an iPad by the end of 2011". Within this group, News Corporation has targeted what Murdoch describes as a "growing segment … that is educated and sophisticated but does not read national newspapers or watch television news."
If this makes The Daily sound like a bolt-on addition to the media ecosystem, Murdoch is also dreaming of something much bigger. Away from his script, during an interview on Fox Business News, his words suggested a bid to promote cannibalization of print audiences.
"I really believe that everybody in America who can afford one is going to buy a tablet," said Murdoch. Ultimately, he added, he would like The Daily to overtake the 26 million audience attracted by American Idol on News Corporation's Fox network.
News Corporation executives may smile at the old man's hyperbole. But the intent is clear. What's more, Murdoch claims that he isn't phased by the prospect of cannibalizing print audiences. "Oh, there may be some expensive changeover," he said yesterday. "Net-net I think we will get."
In the US, where Murdoch's big newsprint assets -- a high-end business newspaper and a dying east coast tabloid -- remain peripheral in terms of mass consumption, this makes sense. Cannibalization can work in his favor.
In the UK, where The Times still charges $16 for a standalone iPad app, things are different. News Corporation controls 30 percent of the newspaper market by circulation. That's a big a chunk of revenue to risk. The question of who might emulate his efforts here remains open. If successful, The Daily may well encourage a latter-day Eddie Shah or James Goldsmith to try their hand.
Aside from an initial investment of $30m, Murdoch says that The Daily will cost $500,000 a week to run, or $26 million a year. Assuming that News Corp attains what Jonathan Miller, its digital boss, describes as a desirable 50/50 split between advertising and reader revenues, The Daily will need at least 325,000 subscribers paying $40 a year to break even. Taking into account the 30 percent gatekeeper fee that News Corp will pay to Apple, that figure rises to 420,000 subscribers.
In the US market, this is fairly small beer: USA Today sells an average of 1.8m copies a day in print. The New York Times sells 800,000. The Daily is a lot cheaper than either. "We're very confident of the finances, but we expect them to be quite revolutionized when we hit the big figures," says Murdoch. Of course, if that revolution occurs, it will be largely attributable to advertising, something that was barely mentioned at The Daily's launch. Almost certainly, this part of News Corp's proposition remains undercooked. Advertising may also become the source of serious future conflicts with Apple, whom Murdoch flattered shamelessly yesterday.
Other doubts persist. Aside from the possibility that News Corporation might struggle -- yet again -- to make a success of pure-play digital venture, not everyone shares Murdoch's faith in the "magic of newspapers," a phenomenon that News Corporation's chairman and CEO attributes to "serendipity and surprise and the deft touch of a good editor".
These words, delivered by Murdoch at the Guggenheim yesterday, will hearten traditional journalists. But to the founders of a new wave of socially-curated content apps like Flipboard, Ongo and Pulse, they will sound like a challenge, a sideswipe, a put-down. The suspicion remains that Murdoch's reverence for the "deft touch of a good editor" is an excuse to build a walled garden that restricts our desire for free-range consumption.
Inside Apple's ecosystem, we're set for a re-run of a familiar experiment. It will pit editors against code and paid-for content against the free alternative. The big difference this time around is the arrival of social media, which may help Flipboard and similar services gain traction in the mass market, something that RSS never managed.
If the new efforts at social curation get that far, they'll find Rupert Murdoch and The Daily waiting for them.
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