The Daily, the iPad-only publication touted by Apple and billed as News Corporation's grand experiment in digital news will cease operations this month. NewsCorp had invested millions in new technology and infrastructure over the past year in the much-lauded app that some had dubbed the future of news.
According to a statement by Rupert Murdoch, the publication, which cost subscribers 99 cents a week, was unable to build an audience quickly enough for its business model to become sustainable.
I'll admit to being surprised. I didn't feel The Daily would be a huge success, but I also didn't believe it would be allowed to fail quite so quickly, if at all.
Here's my take on the situation: it's easy to convince someone to buy an app on their iPad or mobile phone – as long as they have to pay only once.
It's also relatively easy to convince someone to buy a service or feature within the app – referred to as an in-app purchase, and one of the most common ways to monetize an app -- but asking them to subscribe on a device that already has access to news for free spells trouble.
In a sea of free news apps that deliver much the same content and spend less on production, what hope did The Daily really have?
Newspapers and the corporations that own them are ingnoring the cardinal rules of doing business on the Web; keep your operating costs low, make money on volume and most important, don't require a cover charge to get in. For an app that's delivering news, that means keep people coming in and monetize the traffic itself.
Newsmen like Murdoch feel uneasy giving the news away, but in fact they aren't. Ads on any website, or in any app, should easily cover the cost of the infrastructure and with an app as prominent as The Daily, the cost of operations as well. In-app purchases, perhaps special topical sections, videos and the like, should be considered gravy.
Customer loyalty on the Internet is practically non-existent, there are almost no monopolies on services, and you can nearly always get the same information one site has someplace else. Until publishers get that into their heads, they'll continue to have problems.
Excellent example: the Huffington Post. No paywall, no print edition, but one thing it does post (in addition to numerous stories from numerous sources) is a profit.
Nick DeLorenzo is director of interactive and new media for The Times Leader. E-mail him at email@example.com.