News Corporation’s Rupert Murdoch has launched a digital newspaper for the iPad called the Daily, which he said he hoped it would be an “indispensable source of news” in the tablet era. But will it catch on? Adrian Drury, analyst at Ovum, takes a closer look…
The Daily is a massive new venture for News Corporation, reportedly costing $30m to develop and $26m a year to run. The app has initially launched in the US via iTunes, and comes with a cover price of 99 cents a week, or $39.99 a year.
Commenting on the launch, Adrian Drury, Ovum analyst said: “While The Daily is the venture hogging the spotlight, it is just the latest in a series of fascinating experiments being conducted.
“What is different however for The Daily is the strategic and financial muscle of News Corp. It has been developed in partnership with Apple and this should secure it a prime location in the iTunes Store.
“In return, News Corp will be playing by Apple’s rules and processing subscriptions through the In-App Payment functionality and paying a revenue share in the process. The specific terms News Corp have negotiated are unknown, but every other publisher now faces paying 30% of their hard won iOS application subscription revenue to Apple.
“The market The Daily launches into is challenging. Interest will spike at launch but it will be subscriber numbers at the end of 2011 that matter. It faces a universe of free content delivered via Google through the browser, and it faces a growing range of free news applications in the App Store.
“It will need sustained, heavy promotion and a compelling pricing strategy. However its main strategic advantage may prove to be that its parent has deep pockets, and this is going to buy it time to build an audience and refine its model”
Source: Ovum
