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Dec. 3, 2012, 11:56 a.m.
Business Models

Some lessons from the demise of The Daily: Was it the platform, the content, the structure, or the business model?

The built-for-iPad “newspaper” is closing on December 15. Here are the ideas some are taking away from News Corp.’s high-profile venture into a platform-specific news organization.

It’s official: The Daily is closing.

Launched to high expectations in February 2011, the iPad-only daily “newspaper” was the target of much anticipation and sniping from the start. As early as April 2011, we were charting what seemed like a leveling-off of interest, and its choices — to charge for content in an era of free, to be platform-specific in an era for the platform agnostic, to ape a print newspaper’s publication schedule when little could seem less timely — made it a flashpoint.

I asked our 105,462 followers on Twitter for their thoughts on the cause of death. The lessons they tossed out fit mostly into four overlapping diagnoses:

1. It’s the platform

The most common claim was that The Daily’s device-bound nature limited its potential. (The Daily started out as iPad-only, although it eventually grew to include iPhones, Android tablets, and the Kindle Fire.) Locking into a single platform and not having a web front door limiting sharing and social promotion, this argument goes. (The Daily’s stories do exist on the web; they’re just hard to discover without a Daily subscriber sharing them out first.)

2. It’s the content

Or maybe it was the content. The Daily’s stories were criticized as an odd middlebrow mix, aiming a tabloidish sensibility at an early-adopter audience. There were some very solid scoops and features along the way, but it didn’t feel essential to most.

3. It’s the structure

Another school of thought: The Daily was too big, too corporate, too locked into a daily-newspaper mindset.

(That’s from Taryn Wood-Norris, who was/is (?) senior designer at The Daily.)

4. It’s the business model

Then again, maybe the problem was just about making money: charging in an environment where most content is free and mobile advertising is still immature.

My take

I think each of these arguments has some truth. But I think in the end, the demise of The Daily was most about #3: the structure.

Here’s the thing: The Daily had over 100,000 paying subscribers. That ain’t nothing! With most subscribers paying $39.99 a year (others paid 99 cents a week), minus Apple’s cut, that’s around $3 million in annual revenue — and that’s before you add in advertising revenue. At various points, it was the highest-grossing app in the App Store in 13 different countries. In the United States, it’s been in the top 5 of news apps by gross since launch and, until this summer, consistently in the top 20 of all apps — even including Angry Birds and the rest.

You can absolutely build a real online news organization on that kind of revenue. You just can’t build one that has 200 staffers. Or 150 staffers. Or 100 staffers.

It certainly didn’t help that the app itself was grindingly slow for too long (although it did get faster over time). And it didn’t help that the content was fungible and a little mushy.

But to see the glass as half full: The fact that an outlet with its problems could still generate 100,000 paying subscribers is a sign that an outlet with a sounder strategy, a more defined ambit, and a more realistic sense of scale could get even more. The number of people with tablets will keep growing; people’s comfort with paying for digital content will continue to increase; companies will get smarter about production efficiencies.

And on a day when News Corp. gets a step closer to breaking up, let me take a moment to praise Rupert Murdoch for giving The Daily a try.

News organizations have been talking about the need to create new products for a while, from the days of Newspaper Next and before. But it’s mostly been talk; faced with their own individual fiscal cliffs, news executives have spent the past half-decade cutting and cutting and cutting, which hasn’t left many resources to use on building new things. News Corp. — in large part because it’s part of a big corporation that can take “Avatar” money and move it around — made a pretty big bet on an idea.

It didn’t work out. But at least they tried.

POSTED     Dec. 3, 2012, 11:56 a.m.
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