Don’t write off Murdoch’s paid iPad newspaper quite yet

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Eight months after News Corp. launched the iPad only newspaper The Daily, some observers are claiming that – with only 80,000 paid subscribers – it isn’t doing very well. There are another 40,000 people currently on a free trial, according to reports.

At the time of its launch, News Corp. CEO Rupert Murdoch – who may be the world’s most aggressive evangelist for the concept of people actually paying for digital content – said he would consider The Daily to be successful when it has 500,000 subscribers.

Assuming The Daily maintains its average of 10,000 new subscribers per month, that puts it at its defined level of success in another 42 months – less than five years from startup.

For a big-deal project that utilizes new technology and depends on changing some of the most basic behaviors of its intended audience, that doesn’t sound like a bad ramp-up to me.

USA Today took far longer to become successful. Facebook became bigger faster, but it has never charged users and it took at least as long for the company to deploy a meaningful business model. Netflix expected to LOSE nearly 600,000 subscribers in 2011’s Q3 – simply because it removed DVD service as a cheap add-on for its paid digital (streamed) content. Compared to these, The Daily appears to be moving toward its goals very nicely.

The Daily also hasn’t expanded beyond the iPad platform, which has limited potential subscribers. If/when it’s made available for Droid devices and the new generation of e-readers, I expect that paid subscriptions will begin to increase beyond an average of 10,000 per month. By the time it has 250,000 or so subscribers, enough people will hear about The Daily in the course of their ordinary comings and goings that it will also pass a threshold of importance for a whole new audience of people who, at this moment, still refuse to spend money on a digital subscription.

Over time, the notion of paying for digital content will become normal; at that point, many of the media that are waiting for The Daily to fail will begin to benefit from the expensive groundwork that Murdoch’s company has chosen to undertake. They too will begin charging for their content; they too will struggle until reaching a level of critical mass. But they’ll have the luxury of doing that work without the scrutiny that The Daily is receiving now.

I’m saying all this without ever having read The Daily, as I’m not an iPad user. Perhaps it’s not a great product. Perhaps even people within News Corp. are disappointed that The Daily has just 80,000 paid subscriptions.

But I’ve learned over time that the toughest sell is the one that requires prospective buyers to change their behavior before spending money. At that, it sounds to me like The Daily is already successful.



About the Author:

Bob Rosenbaum is founder and principal of The MarketFarm, a content-oriented strategic communications firm.

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