The Daily was a $10 million losing proposition last quarter

Thu, May 5, 2011


In early February, Apple and Rupert Murdoch’s News Corp released The Daily, the world’s first iPad-only newspaper. The aim of The Daily is to provide a modern take on news events and to distribute that news in an engaging experience wrapped up in a multimedia experience. What this means is an interactive newspaper that combines the use of text, photography, video, and of course touch controls, to deliver what aims to be an unparalleled way for users to access, explore, and interact with the news.

“New times demand new journalism,” Murdoch explained a few months ago at the paper’s launch. “So we built The Daily completely from scratch — on the most innovative device to come about in my time — the iPad.”

The cost of The Daily is $0.99 a week or $39.99 for an annual subscription. Though the paper was intiially offered for free during the first two weeks following the apps launch, reportedly low download rates forced News Corp. to extend the free trial period for a few more. Moreover, user complaints about issues such as sluggish performance undoubtedly compelled News Corp. to extend the free trial period as well.

In any event, News Corp. earlier today divulged some financial information about The Daily during their third quarter earnings conference call. During the quarter gone by, News Corp president Chase Carey explained that they’ve lost $10 million thus far on the app. To be clear, though, most of the losses were attributed to one-time investments necessary to get the initiative up and running. Moreover, keep in mind the the paid-only version of The Daily had only been available for about a month and a half by the time News Corps’ third quarter came to an end.

Also of note is that there have been approximately 800,000 downloads of The Daily thus far, though we’re not sure how the breakdown between paid and free downloads shapes up.

The company has previously said investment in the tablet-only news title will run to $30 million by the time fiscal 2011 ends in June. That includes $7 million in Q2 and an early run rate of nearly a half-million dollars a week.

Asked on the call, by my colleague Staci Kramer, Carey refused to disclose The Daily‘s free trial to paid subscription conversion ratio. “We’re not going to build this in a fishbowl,” he said. That sort of detailed information is not something we’re going to share publicly at this point.

“It’s really early days,” Carey said. “It’s only a month-plus that it’s been pay-based. It’s actually one of the most downloaded news apps out there. It’s a work-in-progress, we’re proving the technology, refining the content – the tablet market is still in its infancy.”

The Daily was the first publication to make use of Apple’s new subscription billing feature, which as we reported earlier, is now rolling out to other publications with Hearst publishing being the latest publishing giant with plans to make its content available via subscriptions to iPad users.

The Dailyis currently an iPad exclusive, though News Corp. has plans to port the app over to other tablet devices.

via Paid Content



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