For Rupert Murdoch, There's No Downside to His Tablet-Only The Daily

Last Updated Nov 22, 2010 2:48 PM EST

The best strategic detail in Rupert Murdoch's planned tablet-only newspaper, The Daily, is that it doesn't exist -- make that, it doesn't exist anywhere else. So, while some, including Murdoch himself, are hoping the devices like the iPad can jump-start acceptance of digital subscription models and save the newspaper business, it's an incredibly savvy play to build a new news product that isn't intent on saving anything.

Instead, The Daily -- which may go into beta as early as next month -- is starting with a clean slate. Not only is it not the iPad version of an existing product, it also comes to the marketplace with no legacy idea in consumers' minds about whether or not it's worth paying for. That is key. With apologies to Tina Brown, The Daily will be its own beast.

In fact, if it owes its pricing model to anything, it's to the app world. At 99 cents per week, or $4.25 per month, it's priced similarly to many other apps currently available in the iTunes Store. If what Murdoch has reportedly studied about impulse purchases is true, it won't matter that he's asking people to pay 99 cents once a week rather than 99 cents for an entire app. Like Pavlov's dog, apparently people see the price tag $.99 and their fingers just reflexively click.

But The Daily is interesting for another reason: it can also serve as News Corp.'s (NWS) Trojan Horse when it comes to the myriad issues surrounding paywalls. While Murdoch has been perhaps the most vocal, and active, media exec in insisting that consumers pay for content -- The Daily will allow him to experiment, in ways he might not be able to with the paywalls he's erected for such properties as News of the World. If the Daily succeeds, great, and if all it does is teach News more about the market for subscriptions in the digital age, so be it. It's not that big a deal.

In fact, whatever you think of Murdoch, the septagenarian is actually perfectly positioned to invent a new news model for the iPad. Mashable this morning called The Daily "a big and risky bet", but the fact is, for Murdoch, it's neither of those. Forbes' Jeff Bercovici estimated first-year costs of the project at $30 million. That's a drop in the bucket compared to the almost $7.5 billion in revenue had News made in the last quarter (its fiscal Q1).

In the wide, wide world of News, The Daily's start-up budget is a rounding error. The project is driven by the same philosophy that has driven Murdoch's attempt to go up against The New York Times with a "Greater New York" section of The Wall Street Journal: he's doing it because he can.

But there is a difference. While The Greater New York Edition isn't a great idea, for reasons I've outlined in other posts (see below), The Daily could just be one -- but better yet, for a media mogul like Murdoch, there's virtually no downside in giving it a try.

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