Monday, February 7, 2011

Rupert Murdoch, News Corp (NYSE:NWS), and 'The Daily' on Apple's (NASDAQ:AAPL) iPad

Most coverage of Rupert Murdoch's and News Corp.'s (NYSE:NWS) foray into a digital newspaper misses the point, as the current data on how many Apple (NASDAQ:AAPL) iPads are available to offer the digital newspaper "The Daily" on aren't relevant in the short term.

Murdoch has a longer time-frame for his projects than most western businessmen, and so to take the existing numbers and project what it'll take for success or failure may be interesting, but also irrelevant.

One example used is the totality of mobile ad spending projected for 2011, which according to eMarketer is about $743 million, and for 2012 - $1 billion.

What's wrong with those numbers is it doesn't include a media outlet like "The Daily," whose very creation could change the ad picture, as it would centralize viewers in a way companies like and understand. At this time the ad spend is spread around an unkown and large number of mobile properties.

But even that's only a small part of the picture. As mentioned, Murdoch tends to have a longer outlook for his projects, and isn't stingy when launching a new one, such as Fox Business, where he gave it significant financial resources and time to ensure every possibility of success. The same should happen with "The Daily" as well.

This of course doesn't guarantee success, but it does help lower the percentages of failure.

To that end, Murdoch has an initial investment of $30 million to start things off for The Daily, and another $26 million annually to keep operations going. Somewhere around 100 employees were assigned to the project.

Estimates are it'll take about 650,000 subscribers for The Daily to break even, and probably a little more than that when taking into consideration Apple's take for selling it via its App Store.

With a long-term commitment, strong financial backing and the people to get the job done, that number isn't as daunting as it initially looks at first glance.

Media companies know to thrive in the future digital media will have to be a large part of the picture, and Rupert Murdoch and News Corp., among the major media companies, has been willing to take the lead on using their resources to carve out a number of digital niches.

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