UPDATE FEB. 2: Apple rejected Sony’s new e-reader app from its app store — a move that makes Murdoch’s lavish investment in The Daily look even riskier…
On Wednesday morning, News Corp. will hold a press event to unveil the first-ever iPad-only newspaper, The Daily. The little that we know about this project raises some pretty big questions, and I suspect that after the announcement most of those questions will remain. Here’s what I’d like to know:
How can this possibly be worth such a massive up-front investment?…
PaidContent reports that News Corp “is investing $30 million in the new tablet effort, which has more than 120 staffers and is based in the company’s Manhattan headquarters.”
That’s a ton of overhead — way too much, I think, for what is essentially an in-house startup.
With all the uncertainties surrounding such a speculative venture, and with the current state of the news business, I’m astounded that News Corp would throw such massive resources toward The Daily. Especially when there are much more likely payoffs with the lower hanging fruit of mobile media — such as doing a better job of delivering existing content for the full range of mobile devices in the field today, and being more creative and aggressive about selling mobile advertising.
The iPad is very popular and trendy right now. But it’s just one device, with several unique considerations of design and technology.
Plus, the iPad has a lot of competition, which grows more fierce by the day. At the recent Consumer Electronics show many Android tablets were on offer, and these devices are now becoming as common as iPads in coffeeshops and households around the US. I’d hope that News Corp is planning an Android edition of The Daily — but I bet Apple would have a big problem with that, which could gum up the works on the subscription front.
News organizations and other content publishers who focus too heavily on delivering to a single proprietary device or platform risk getting trapped in a cul-de-sac. This is not to say that The Daily couldn’t generate a fair amount of revenue. In fact, it may do quite well, at least in the first quarter or two with all the buzz. But enough to sustain a staff of 120? In prime Mahattan office space? For how long?
I applaud innovation — but generally, I think it’s wiser to innovate with smaller teams and budgets first. That gives you more freedom to be responsive and agile in how you develop and position the product.
Starting with too much overhead tends to lock projects in to an unchanging course, for better or worse. Commitment is good; but chaining cement blocks to your feet generally isn’t the most useful way to establish commitment.
Risk-taking is noble, and (in today’s media landscape) necessary. But so far, The Daily sounds, to me, more like wishful thinking from company pining for the days when it was fully in control of distribution — and when it could easily afford to lose huge speculative investments.