Tuesday, December 4, 2012

Murdoch ditches digital newspaper

The Daily, an experimental iPad newspaper launched in February 2011, has been axed by News Corp. The publication attracted about 100,000 subscribers but it was well short of 500,000 required to break even. Mr Murdoch was losing $30 million a year on this venture so he decided to pull the plug early.

Just 18 months earlier Mr Murdoch hailed The Daily as the future of journalism with "no paper, no multimillion-dollar presses, no trucks". He had high expectations and believed the publication will “sell in millions”. The costs to run The Daily – with no subscribers or advertisers – were estimated at "less than half a million dollars a week". However, less than expected subscription numbers and the cost of employing 170 staff made the venture unsustainable. This result could have been easily predictedand I flagged possible problems with Mr Murdoch digital media strategy in one of my earlier posts.

It also appears that none of his decisions regarding subscription-only access to digital versions of several flagship newspapers is delivering the benefits he expected. In particular, in July 2010 he announced that The Times and Sunday Times newspapers would go behind a paywall and that the content will be completely removed from indexing on Google News. News International is currently relaxing those restrictions, temporarily removing paywalls for events such as the Queen's jubilee and selected days of the Olympics. In September 2012 News International also eased its policy to allow headlines and limited content from articles to appear on Google, as part of a "limited preview". The Sun's website remains free with no plans in the pipeline to restrict access to its content. It’s back to square one for Mr Murdoch and all newspaper publishers who are desperately trying to find a sustainable business model in the digital era.

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