Demise of digital news outlet offers lessons

The demise of The Daily, the much-hyped first iPad newspaper, was almost not even news. The newspaper came into existence with a bang, as the perceived joint brainchild of the world’s best-known media mogul and the man hailed as one of the leading technology geniuses on the planet. The whimpering manner in which The Daily went out was not something Rupert Murdoch or Steve Jobs would have expected or been pleased about. All the promises and enthusiasm that marked its launch overshadowed the possibility that, within months, this media innovation would be put on life support.

The figures related to The Daily’s failure are disheartening, especially for the lesser players in the print-media industry. Six months after its birth, it claimed 80,000 paid subscribers, and a later increase of 20,000 was also mentioned. While many newsrooms would uncork the champagne for a 100,000-member subscription base, The Daily’s staff and investors must have felt the noose tightening. After all, 100,000 was far from the 500,000 necessary to break even and totally out of step with the growth of the iPad (and the iPhone, and Android) installed base, according to The Guardian’s analysis.

Many people believe they know what went wrong – or what should have been done in the first place. Key reasons cited for the fall of The Daily include its relatively “late” content, ambivalence toward current affairs and insufficient readers’ engagement – which combined to form some kind of identity crisis. 

The simplicity and high efficiency of the Web-based Huffington Post has been mentioned in comparison. Apart from the look and feel, The Huffington Post and The Daily also differ on costs. That The Daily reportedly lost US$30 million begged the question why so much was being spent at a time when digital journalism is supposed to require significantly low investment.

Hopeful watchers must have been shocked. If a Murdoch-Jobs combination offering news in a glamorous format at your fingertips can’t make it, what can? The Daily’s under-performing advertising sales were alarming, and a key reason for the losses. The newsroom, even when streamlined, employed 150 people a few months ago, a number that less-affluent digital-media adventurers can only dream of. What if such manpower and other resources, critics ask, had been cut by half and directed toward something Web-based? 

The Daily somehow mistook the old business model of heavy investment as the formula for success. On one hand, it moved away from actual paper. On the other hand, it tried to keep everything else, albeit under new guises. What if The Daily had thrown away the subscription concept, allowed free downloads and hoped to cash in on the massive number of eyeballs? Yes, that’s similar to the “free-sheet” concept, but it also follows the behaviour of news consumers in the modern era, who’d rather search for news, or let news find them, than pay for it.

A key pioneer has folded, for whatever reasons. Information associated with the failure has confirmed what the media industry already knew: fewer and fewer people are paying for news, no matter how cheap. Print is dying, but entrepreneurs are caught between a true sense of panic and the fact that digital advertising remains significantly small compared to print advertising. If you go too slowly, you’ll miss the digital train. If you go too fast, you, in effect, leave a well that hasn’t even run dry yet to find a new source of water, not knowing how many days it will take.

In today’s world, people are hungrier for information than ever before. One thing the media industry has to be acutely aware of is that people are also a lot more resourceful than ever before in looking for it. The Daily addressed the first mode of behaviour but didn’t seem to pay much attention to the second. It’s up to the new pioneers now to figure out what to do.