Steve Jobs and Rupert Murdoch Save Newspapers -- Well, One, At Least
The newspaper industry has waited for a white knight to save it. And if publishers expected that rescue might come on an iPad, they might be right. Apple (AAPL) CEO Steve Jobs and News Corp (NWS) CEO Rupert Murdoch are rumored to have collaborated on a digital newspaper called the Daily. With an expected release at the end of the month, it is supposed to be designed strictly for tablets, with neither a print nor open web version, and will cost 99 cents a week.
Murdoch, often derided for his insistence on pay gateways to his publications, and Jobs, often seen as incapable of making a mistake, have joined forces in a way that might actually bring new vitality to the newspaper market. There is a lot of smart thinking in the new approach. However, newspaper publishers salivating at the thought keeping their jobs by regaining old profit margins had best find a quiet place for a drink, because they are already too late. This is a life raft with very limited seating.
What triggered Murdoch in exploring the tablet-only approach (and, to be clear, the Daily ultimately won't just be for iPads) are the following facts and assumptions:
- People get more involved with their iPads than they do with the Web.
- Eventually tablet prices will become low enough that they will reach cell phone ubiquity.
- Consumers will often choose apps over a web browser to get information, even when it is available in both formats.
- Producing a newspaper in app form only cuts all paper print and distribution costs as well as significant expenses in maintaining a Web presence.
- People have proven that they will make inexpensive app purchases impulsively.
Clearly, you can't apply this to everyone. There are millions of people who swim through rivers of information, picking up what interests them. And yet, there probably are many times more individuals who just want something simple that gives them what they want without demanding too much in return.
The Daily could become the information equivalent of an Apple product, charging a premium price for something that largely works as advertised and that doesn't require too many choices or decisions in how you operate it. And the price is low enough that people will opt in and not notice a painfully high renewal price.
Murdoch is deadline serious about this, given the people he's reportedly brought into the venture, including the following:
- Jesse Angelo, heir apparent to Col Allen, editor-in-chief of the New York Post
- Greg Clayman, former head of digital distribution for Viacom (VIA)
- Richard Johnson, who was the start of the Post's Page Six gossip and celebrity section for years
- Sasha Frere-Jones, a former New Yorker music critic
- Mike Nizza, previously at the New York Times, Aol News, and the Atlantic
- Steve Alperin, ABC news producer
- Pete Picton, a former online editor at another Murdoch paper, the Sun
And that's where the bitterness will come in for other newspaper publishers. I don't know that the format could support many purely tablet digital news publications. Furthermore, not many publishing companies could afford a 100-reporter start-up that might eventually put a cash cow paper edition out of business. Because of that, traditional papers won't be able to jettison major publishing expenses and risk losing their current audiences.
In other words, tablets might save the newspaper industry in the form of only a few publications that survive. The rest won't have any better luck than they are having now.
Related:
- For Rupert Murdoch, There's No Downside to His Tablet-Only The Daily
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- Content Mill Demand Media Expands Its Reach -- To More Newspapers!
- Apple's iPad Will Kill Publishing As We Know It