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The Daily shutdown highlights digital-only publishing challenges

Media conglomerate News Corp. is shutting down its mobile-only publication The Daily, pointing to the problems that publishers have had with gaining both scalability and revenue with their mobile initiatives.

The Daily was launched in Feb. 2011 with a $30 million investment. However, based on its digital-only approach, many experts have been skeptical of the publication?s success.

?The Daily is a classic example of the problems that companies hit when they take traditional business models and try to make them work on different platforms,? said Jason Armitage, London-based senior analyst at Yankee Group.

?It works when you extend a current print subscriber to digital, but it has real problems with expecting consumers to have a digital-only subscription.?

The Daily did not respond to press inquiries by deadline. 

Details of the deal
News Corp. announced in a press release that the publication?s last issue will run on Dec. 15, citing scalability as a challenge.

The shutdown also falls in line with News Corp.?s new split into two publicly-traded companies.

The publishing arm will continue to go by the name of News Corp. and will include assets from The New York Post, HarperCollins, The Wall Street Journal and Australian television assets.

Additionally, the company announced that some of the technology and staff from The Daily will transition over to the New York Post.

The other part of the new company ? Fox Group ? will contain the Twentieth Century Fox, Fox Broadcasting and Fox News properties.

Similar to the approach that many media companies take with mobile, the publication was first available on Apple?s iPad.

The publication eventually also became available on iPhone and Android devices to expand its reach (see story). 

According to Mr. Armitage, although the news industry has established several business models, very few prove to be successful.

The ones that have succeeded are the ones that take a traditional print product and apply it to the digital world.

Often, this means bundling content for subscribers into print and digital content.

Many traditional publishers such as the New York Times, Condé Nast and The Financial Times have seen success around this business model.

?If there is an upside, it is more for the company to take the technology and processes and bring them into other existing properties that are more suited for digital distribution,? Mr. Armitage said.

Brand building
One of the biggest challenges that The Daily had was trying to break into the news space without a well-known brand behind it.

?The primary takeaway here is that brand-building is difficult in an app,? said Josh Martin, director of app research for the global wireless practice at Strategy Analytics, Newton, MA.

Additionally, by going after a small group of iPad-only tablet users at launch, The Daily might have had a rougher time acquiring users than if it had launched on devices such as ereaders and other tablets that have strong content consumption trends.

?Unless you were an early adopter, an organic growth beyond that initial launch was difficult,? Mr. Martin said. 

"[The Daily] was early for its time ? you have a linear audience that wants to read magazines, which might not be aligned to tablet-only owners,? he said.

If The Daily were to shift to an HTML5 product, the company also might have been able to bring more users on board, per Mr. Martin. 

Content via The Daily?s iPad app went for $0.99 per week or $39.99 per year. Without a strong value incentive for readers, the price might have been expensive enough to turn a user off.

Going forward, Mr. Martin says that he expects to see more well-known publishers leverage their print reputation and user base into digital platforms.

Mobile opportunity
According to some experts, the news of the publication's shutdown does not necessarily set the tone for the future of mobile publishing.

For example, News Corp. might have been smart to cut off The Daily, which it publicly claimed to be an experiment, as it spins itself into two companies.

?The Daily?s shutdown is not directly applicable to other apps from publishers because it is in a unique place with News Corp,? said Agata Kaczanowska, lead industry analyst and media specialist at IBISWorld, Santa Monica, CA.

However, the news does point to the difficulties that marketers have had with digital publishing, specifically on mobile platforms.

?It was exclusive to one platform that has not been understood yet by publishers and advertisers,? Ms. Kaczanowska said.

?Newspapers cannot succeed in only one platform ? print-exclusive publications are virtually not existent anymore,? she said.

?Mobile is just another way that publishers can reach their audience. The fact that this publication is being shut down does not signal a slow down for other mobile publishers.?

Final Take
Lauren Johnson is associate reporter on Mobile Marketer, New York