In a room with Rupert Murdoch and a few other smart guys, the following conversation occurred during the conception of The Daily (ok, not really). “I have an idea! Let’s start an iPad only newspaper app where we charge users a small fee to wait 2 minutes each day for the app to update. We’ll initially give it out free to all our friends (probably in their 40s/50s with existing subscriptions to WSJ and NYTimes because they’ll totally pay for this thing). Oh, and let’s sell ads too even though people are paying a subscription fee for this thing. We’ll sell it into Brands as a way to access a user’s ‘personal primetime’!” Scene.
The Daily isn’t the first attempt to create a digital only newspaper, but it was one of the most hyped efforts. After shutting down, we can take a few key learnings with us: 1. Initial user growth is important – don’t mess it up by giving it away to your friends and ‘strategic’ networking contacts. 2. Don’t blame it on the device. 3. Balance Content and Technology.
When The Daily first came out as a beta, I was working at an ad agency and remember VP level media folks talking about it with each other. They all had first looks, but none of the media planners/Apple fanboys/heavy app users received access. A media planner that’s had an iTunes/App store account since she was in high school trolls the latest gossip from The Superficial, and tweets to a follower count of over 3k cannot be overlooked. Especially when that media planner holds the digital media budget for a top 100 advertiser (I’ll save that discussion for another post). One of the biggest mistakes The Daily made upon its initial launch was not giving the app to their core audience and instead wasting valuable time with an aspirational audience that would never trade their WSJ and NYTimes reading time for an average news, celebrity gossip heavy iPad app.
The iPad surpassed Mac avg. purchases per hour on Black Friday 6.7 to 3.9. To say The Daily was doomed from the start due its growth being contingent upon iPad adoption is a cop out. Plenty of apps found their audience on iPad – Flipboard, Pulse, and Angry Birds (had to mention it). The Daily reported over 800,000 initial downloads in its first few weeks – yet closed shop at around 100,000 paid subscribers. Churn rate seems like a more direct reason for The Daily’s failure than lack of iPad growth when you take into account device adoption rate increase YoY compared to a The Daily’s drop in users at launch to their most recent subscriber numbers.
One of the most highlighted features of The Daily was its innovative technology it brought to the publishing world. Technology can only get you so far when the content and/or user experience is lacking. The market chews up technologically innovative daily (no pun intended). Color Labs is an example of a company with a lot of hype, no user base, and proclaimed ‘innovative’ technology that powered the app. The Daily wasn’t competing against top tier newspaper outlets with their own iPad apps and existing paying readers – it competed against the other (free) average news content apps because it wasn’t seen as a top tier publication. One of Instagram’s founders described the importance of app developers to build simple, which led to their success and user growth to 100M and counting. At the end of the day, users don’t care how great the back-end technology is if they can’t use it or they find the content lacking they won’t pay for it.
The Daily is not an example of paid content failing in a free content society. It’s an example of an app with the wrong strategy, wrong audience, and wrong USP. At least Rupert Murdoch now has a major stake in the Yankees Station (and Fat Jeter) and can rest at night that The Daily will not end iPad-centric publications for the future.
Jayne Pimentel leads Business Development for Adaptly, a social media ad tech company.