The Daily's Deficiencies Don’t Define Digital Destiny

For some reason the recent announcement that The Daily iPad only newspaper is laying off 29 percent of its staff, or 50 jobs, is a bellwether of the struggles digital-only publishing endeavors face. This couldn’t be further from the truth.

The reality is The Daily has been its own worst enemy since it launched in Feb. 2011. That was problem number one. The launch was only ten months after the iPad first went on sale, which was way too early as penetration was only about 15 million units sold.

Then, reports stated News Corp. spent $30 million on the launch with another $20 million in expenses during its first year. A $50 million tab is exorbitant for a digital start up venture but not surprising considering its bloated staff of 170. This isn’t indicative of a startup mentality. This is old media thinking for a new media venture.

And what did The Daily provide its readers for that massive investment? Well, when was the last time The Daily broke a substantial news story, or shined the light on a subject with an in-depth investigative piece? The content is bland. Why should a New York Times reader invest in The Daily—especially if a reader isn’t philosophically aligned with the typical Fox News slant?

And the problem is only going to get worse, as sports and opinions are the two hard-hit departments. Sports news is already just a replication of info readily available from numerous other free media sources. Opinions and commentary should be a centerpiece for its editorial philosophy instead of reporting news that is already a day old, just like traditional media. This is just another piece of evidence of old media thinking, where the method of improving editorial content is to weaken it with cutbacks or to improve efficiencies, to use corporate speak.

And where are the destination writers? While the journalists may be quality professionals, there were no contributors, within journalism, or other forms of media, that had followings large enough to attract readers. When Sirius Satellite launched, it signed Howard Stern, Oprah and other content providers to attract subscribers. The Daily needed a couple headliners of its own to grab eyeballs in a busy news marketplace. Then, they needed to market the heck out of those signings. Unlike Sirius, which is sporadic at best in its promotion, The Daily has the benefit of all the Fox properties for exposure, be it through advertising or writers appearing as contributors on Fox programming to provide exposure for the app.

A factor beyond the control of The Daily was the severe damage to the reputation of News Corp., following the phone hacking controversy. While today’s digital media consumers are less discerning about where they get their information, they still want to know they can trust what they are reading.

Yet, despite all the aforementioned shortcomings, The Daily reportedly has 100,000 subscribers and regularly ranks among the top three paid apps. Unfortunately, News Corp., CEO Rupert Murdoch said his initial sales projections for the first year were 500,000, an ambitious number considering the high percentage of total iPad owners that needed to subscribe to meet that figure.

A daily newspaper can not only survive but thrive as an iPad only publication. More than 50 percent of ad spends are expected to migrate to mobile in 18 months. Readers have repeatedly stated in multiple surveys that they greatly enjoy reading newspapers and magazines on the iPad … if it’s done right, meaning it is interactive, engaging and utilizes multimedia. The status quo newspaper simply in digital format won’t work.

How about including audio or video files from interviews as extras, more slideshows or follow up interviews with reporters to add behind the scenes input beyond what story space allotted?

The Daily, like many magazines, is quite static and flat in its design. The Daily doesn’t integrate enough multimedia and its layout doesn’t stretch much beyond what you would see on Flipboard. They are compounding their design errors by now proclaiming a new tact of designing future issues in vertical format only. This is a huge mistake. If they wanted to focus on one format, they should have chosen horizontal. Horizontal media consumption is natural, be it on a computer screen or television. It is also better for displaying photography and graphics. Being vertical only is like taking a magazine or newspaper and folding it in half or viewing your widescreen in standard 4:3 format.

In a July 31 column, Forbes media/technology writer Jeff Bercovici said about the layoffs, “It also raises questions about the viability of digital-only publications. If The Daily, which has consistently been among the top two or three apps in terms of gross revenue in the iTunes store since its launch, can’t make money, who can?”

Actually, nearly $5 million in revenue based on 100,000 subs at $.99 per week is making money. Pundits often forget this segment of publishing is still in its infancy. The big money is still a couple of years from flooding in. The start-up phase should have been for establishing the brand, building the subscriber base and evolving the publication as software and digital production expertise advances.

Profit is another story, but News Corp., must have anticipated losses during the first couple of years. Had they not weighed down their ledgers with the $50 million overhead and Rupert Murdoch not proclaimed the overaggressive 500,000 first-year sales estimate, the perception of The Daily would be different.

Don’t let The Daily’s struggles define the destiny for media’s digital migration. It’s been two years, which is way too early to define and judge this still emerging segment of the industry. This is similar to the naysayers who didn’t believe people would buy digital music on iTunes or apps via the App Store. Digital media is here to stay and the iPad and other tablets will become the primary tool for consuming that media. Sustainable business models are sure to follow. Retail follows rooftops. It’s only our microwave mentality that leads many of us to think otherwise.