The Daily, Murdoch's newspaper created specifically for the iPad. was finally launched this week. Is it going to have an impact - or is it the wrong model anyway?
After a couple of postponements Rupert Murdoch finally launched The Daily, News Corp's attempt to revive the flagging news industry on February 2. It raises lots of questions and the ramifications of changes made to accommodate it are already apparent in the app market.
Is The Daily wanted?
Perhaps the ultimate question is whether the digital equivalent of a traditional newspaper is really what the consumer wants. Is 100 pages covering everything from politics to sport really an attractive proposition?
The sheer size of print (dead tree) newspapers is arguably one of the factors that has contributed to their decline.
Being designed to work on the iPad's touch screen with interactive graphics, videos and 360 degree photos you can explore by swiping may have the necessary wow factor to woo subscribers and others may be impressed by the way it updates repeatedly during the day to cover breaking news. But to skim 100 pages sounds like a lot of swiping. If you buy your newspaper mainly for the crossword or sudoku (another item in the list of features) once you have your iPad there's a seemingly infinite supply of such puzzles freely available.
Is it a viable economic proposition?
Compared to a print newspaper The Daily appears inexpensive. After two weeks in which The Daily is being given away for free courtesy of Verizon, it will cost only 14 cents per day, 99 cents a week or $40 per year.
Murdoch also claims it to be cheap to set up and run having spent $30 million on its development and half a million dollars a week to run - most of this paying a staff of around 100 journalists. Subscriptions are intended to be the larger part of their revenue model initially but the idea is to gain 50% of its revenue from advertising later in the year.
Even so economics are not clear cut. Murdoch has said that The Daily needs 800,000 weekly subscribers to make the publication viable and Apple has sold just under 15 million iPads worldwide to date. This means The Daily has to be purchased by 5 per cent of all iPad owners - and currently it is only on sale in the US so that percentage has to be set higher.
Is Apple the real winner here?
The Daily is an iPad app bought exclusively from the Apple iTunes store. In many ways it is Apple that stands to gain from Murdoch's venture in the short term.
If you want the Daily and don't already have an iPad then that is the major purchase with the profits going to Apple. And while The Daily will only cost you 14 cents a copy Murdoch's model is that many millions will be sold with Apple taking its 30% of every single copy and subscription. And whether The Daily fails or succeeds all those new iPad users will want other apps with 30% of their spend going to Apple. The Daily’s apps and games section links right into the Apple store - and if you get overwhelmed with the Daily you will still have discovered this treasure trove of diversions. In short Apple's risk is zero and it stands to gain a lot
But Apple still wants more...
The launch of The Daily has also led to a shift in the way Apple is regarding publishers. This became apparent when Apple refused to let Sony's Reader iPhone app into the iTunes Store. The app would have enabled iPhone users to purchase books from the Sony Reader Store - so denying Apple the opportunity of its 30% of every purchase.
At the launch of The Daily, Apple announced in-app subscriptions, something that was seen as a plus point for publishers who already sell apps through iTunes as it makes it easier for their subscribers to renew which in turn means they are more likely to renew.The idea is that they simply push a button in the reader and subscribe - it is easy and takes money a painless way. Compare this with having to move to a browser, go to the website, sign up, buy subscription and move back to the reader. Clearly in-app subscriptions are how it should be done.
The Guardian, for example, announced an upgraded version of its iPhone app that day which is now £2.99 for 6 months or £3.99 via in-app purchase - the mini-app with more limited content and features remains free.
The policy Apple is now aiming to enforce from March 31, 2011 means that publishers who sell content - and this includes books as well as newspaper and magazine subscriptions - will have to do so within apps, allowing Apple to cream off its 30%.
What will this change mean for Amazon and for Kindle?
At the moment Kindle's Buy-Once-Read-Everywhere policy works in such a way that whether you use a Kindle device or a Kindle app purchases are made from its store and Amazon gets 30% and 70% goes to the publishers.
Will Amazon be happy to let iPhone/iPad and iPod users purchase Kindle books from the iTunes store?
It seems unlikely and if Amazon no longer can offer the Kindle in iTunes this means that there will be no Kindle reader on any iOS devices. On the one hand Apple would be happy to see Kindle and its non-Apple revenue stream disappear leaving iTunes the only source of content however this may not please users quite as much and a reaction from them and other publishers cannot be discounted.
Apple is clearly using the Daily as a lever to gain control over the content market. It will be interesting to see what happens when the Daily becomes available on "other tablets" as Murdoch as promised for later in the year.
The publishing model
Physical newspapers and magazines are in retreat and we would all like to know what can replace them as both a vehicle for conveying edited news to the reader and a creator of revenue streams that can pay for that edited news. The web is great at delivering masses of unedited raw news with little revenue generation potential. The best it has come up with so far is the crowd-sourced selection of items as provided by news sharing services such as Digg and Boing Boing - which are far from adequate solutions.
The model used by most newspapers is to simply keep on doing what they already do but minus the paper. The Daily is slightly different. It occupies the half world between the constant information flow of the web and the static "today's news" of a paper print. It is updated once a day in the morning and so it represents a body of news that is appropriate for "today" but it also updates as the day goes on to cover breaking news - so opening the floodgates to streaming news just a crack.
Its interaction with users is linear or non-linear according to how they want to read, but its production process is traditional, with 100 journalists turning out articles. While multimedia features - TV news style videos, for example - can be incorporated its engagment with readers is still modeled as a newspaper.
Then there is the issue of Digital Rights Managment (DRM). By being available only on the iPad the Daily has built-in DRM. What is more surprising, however, is the fact that its content is also available without any DRM on the web. This is so that search engines can index it and so that bloggers can reference it. the idea being that it all funnels readers back to the Daily because without a contents page to guide you through the articles you can't have a good reading experience. Of course this is nonsense as already proved by one website which has simply created its own contents page for the Daily web site.
It seem that the Daily has no solutions to the DRM problem and making content available is an invitation for everyone and anyone to read it.
The Daily is the most important thing to happen to publishing in some time - and to deny it is just sour grapes. It is doubtful that it has got any parts of the equation - publishing model, technology, journalism - right but it might not matter. Simply being in the water gives it time to learn how to swim in the new age of ubiquitous touch tablets that are replacing paper before we have figured out what to put on them.