Why 'The Daily' Failed

http://daringfireball.net/2012/12/why_the_daily_failed

by MaxGabriel • 14 years ago

88 70 14 years ago

TL;DR Version: [The Daily's] success was that they got over 100,000 readers to pay at least $40 per year for a subscription. How many digital publications can say that? Not many. And the iPad — with Apple’s simple, trusted, familiar payment mechanism — made that possible. The Daily’s problem was simply that they weren’t conceived to operate on $5 or $6 million per year in revenue. A smarter, smaller team could.

htf2• 14 years ago

Even shorter TL;DR: Some news article claimed that launching a magazine only for Apple's iPad is not a good idea. Gruber comes to Apple's rescue and explains how it's The Daily's own fault if they failed.

sbuk2• 14 years ago

But it is The Daily's fault. Care to explain why it's Apple or their platform's fault? I ask because the article that Gruber linked to sure as hell didn't, and I suspect that you are merely perpetuating lazy internet memes.

bjustin• 14 years ago

The Daily is (was?) also available in a limited manner for Android tablets, billed through Verizon[1]. Apple's payment mechanism apparently had something going for it that The Daily management did not see in Google's Play Store, to the degree that making a carrier deal seemed like a good idea.

[1] http://learn.thedaily.com/android/

mirzmaster2• 14 years ago

Was it The Daily that struck a deal with Verizon, or Verizon who courted The Daily? The latter is to me the more likely scenario. Purely speculating, Verizon could have offered The Daily distribution to its millions of Android customers at a rate better than Apple's 30% off the top.

sedev• 14 years ago

This is interesting to me in that it's a very Clay Shirky response to The Daily's failure. If you read http://www.shirky.com/weblog/2009/03/newspapers-and-thinking... or http://www.shirky.com/weblog/2010/04/the-collapse-of-complex... they seem (at least in hindsight!) to say that things like The Daily, that just stuff a newspaper into electronic form with the least effort possible, are doomed because they haven't changed their cost centers (for bonus points, the latter piece mocks Murdoch, the owner of The Daily, in particular).

I can add very little to Shirky's critique, so I will just recommend that people go and read his pieces and compare their predictions to what actually happened to The Daily.

shmerl5• 14 years ago

> But what’s foolish about publishing on a single platform? ... I publish only on the web

Is he pretending not to understand, or he really doesn't know? Publishing on the web doesn't limit users, since web is an open and accessible platform (given that you have any decent browser). Publishing "to iPad" is artificially limiting your audience, because publishers weren't smart enough to use cross platform publishing technologies (PDF anyone?).

So no - one platform publishing is plain stupid in this day and age. And no - the Web is not called one platform publishing either.

ripperdoc• 14 years ago

Well, one would of course hedge bets and reach farther by going for multiple platforms. But the whole point was that the Daily (and most iPad magazines) mostly go for a "PDF with bells and whistles" approach, and it is exactly that which makes the product poor in usability. PDF is the lowest common denominator, and also the worst in usability and value. But it shouldn't be to difficult to deliver a lean iPad App AND a PDF for those who wants.

shmerl5• 14 years ago

Yes, if they want a classical publishing style in digital form - let them simply ship PDF which anyone can use wherever they want to. And if they want some interactive "bells and whistles" they should better use the web for that. Also many publishers are plagued with DRM paranoia, and instead of shipping their content in various forms they choose some awkward limited mechanism which requires device/tool X to read it.

nglevin3• 14 years ago

Nitpicking, but The Daily uses JSON describing page layouts which map pretty closely to UIKit objects and properties.

No Postscript, no PDF.

You can see this for yourself if you let Charles or any kind of wire sniffer observe the network traffic while The Daily loads a new issue.

acchow• 14 years ago

It's also my understanding that it wasn't possible to link to The Daily articles. So no facebook/twitter/reddit/stumbleupon/etc. sharing. Did they expect that to work out?

jomohke• 14 years ago

I think calling it 'stupid' is a little strong. There are hundreds of millions of iOS users, and many newspapers exist serving cities with smaller populations than that.

iOS is also a very different environment with regards to payment:

- On iOS the process of purchasing paid and free apps is the same: you type in your password.

- On the web the process of purchasing paid applications has built-in friction: 'free' is the default, and payment requires the user to trust the store, input card information etc.

There are more people on the web, but web users are less willing to pay for things.

I don't deny that a larger audience is better, but it adds overhead to support more platforms, so focusing on one can be an advantage. Marco, the creator of The Magazine (http://the-magazine.org), mentioned that he hasn't ruled out other platforms, but with limited resources it's easier to focus on iOS for now (he's the sole developer). Apparently after four issues he already has enough income to pay market rates per-word to writers and hire an editor.

shmerl5• 14 years ago

For example when you buy e-books through some web store, you don't expect all of them to be free, you pay and get your PDF/ePUB or whatever. So it's not an entirely foreign concept for the web.

And comparison with regional physical newspaper distribution is not valid, since physical media is limited with physical space. Digital media is not - it can easily be distributed anywhere the network can reach, as far as publisher put just minimal effort to publish it in accessible form. So there is for sure nothing smart in limiting the distribution media to one isolated platform.

shmerl5• 14 years ago

> I don't deny that a larger audience may be better, but it adds overhead to support more platforms, so focusing on just one can be an advantage

Publishers should however consider approaching their readers with respect. Limiting access to content with platform is not pleasant for those who don't use that platform. In case of physical books / magazines there is no such limitation. So spending some more resources to avoid offending potential readers is a worthy goal. Plus as I said that overhead doesn't sound to be that dramatic - what's so difficult in providing a link to a PDF?

nicholassmith2• 14 years ago

Back of a napkin, shaky math, but if we say The Magazine has maybe 25k subscribers it should net about $42105 after Apple's cut per month, which is pretty damn good money for what's essentially a niche publication, but it's not exactly cash to start throwing after other platforms until it's got a consolidated base on one platform. That 25k could turn to 5k tomorrow if the quality dips.

jopt4• 14 years ago

If access were all that mattered in a platform, you could make the leap from "less accessible platform" to "stupid". I'd personally probably look at a few more dimensions before concluding.

shmerl5• 14 years ago

I only commented in the context of distribution limitations. As others pointed out, it wasn't really the main reason for this publication failure, but it was definitely a flaw regardless of other reasons.

jimhart3000• 14 years ago

But the article he was responding to included the web as one-platform publishing: "Publishing for a single platform, whether print, web, or the iPad, is a foolish move,"

So in that context, his response makes sense.

sami362• 14 years ago

5 million / per year should (conservatively) pay for a staff of ~50. 30 in the newsroom, 10 in software/design, 5 sales, 5 mgmt).

if they couldn't make a 100,000 iPad publication work for this kind of budget, they're bloated & should go out of business.

The failure of The Daily is not a statement on Apple's 30 % cut, iPad vs web publishing. It's a damning commentary on yesteryear's Journalism still not getting it.

natrius4• 14 years ago

That isn't a conservative estimate. I worked for a news organization with a staff of about 30. Our budget was around $4.5 million, and we were pretty light on the (expensive) software side. That's also not accounting for profit, which is typically why people do these things.

panabee• 14 years ago

Interesting, would you mind breaking down the costs a bit more (e.g., fixed costs, cost per journalist, how many journalists vs support staff like IT personnel)?

sidupadhyay• 14 years ago

This may not be a comparable example, but the TexasTribune is a digital only publication that focuses on Texas news and political coverage. They operate on donations and through revenue from content partnerships. According to their about page[1] they will break even on $4.5 million this year.

Looks like the model can make sense. You have to be smart about the audience and focus on quality, value-add content.

1. http://www.texastribune.org/about/

JasonFruit• 14 years ago

For all his faults, John Gruber is perceptive and an incisive writer. I tried to dismiss it as his unwillingness to blame Apple's hardware or ecosystem, but I have to admit it — Gruber's right that tablet-only delivery wasn't the problem with The Daily. His assertion that an ill-defined audience and unnecessarily broad scope killed it is probably mostly on-target, too.

jsnk• 14 years ago

Gruber is perceptive and incisive, but post hoc analyses are dime a dozen. Show me a writer who predicts successes and failures of start ups and ventures at even 60% rate with explanation of why they will, and I'll be at awe.

JoshuaDavid2• 14 years ago

Prepare to be awed:

> An impressive series of studies by Thomas Åstebro sheds light on what happens when optimists receive bad news. He drew his data from a Canadian organization—the Inventor’s Assistance Program—which collects a small fee to provide inventors with an objective assessment of the commercial prospects of their idea. The evaluations rely on careful ratings of each invention on 37 criteria, including need for the product, cost of production, and estimated trend of demand. The analysts summarize their ratings by a letter grade, where D and E predict failure—a prediction made for over 70% of the inventions they review. The forecasts of failure are remarkably accurate: only 5 of 411 projects that were given the lowest grade reached commercialization, and none was successful.

- Kahneman, Thinking Fast and Slow

The full data table is available here: http://www.fptt-pftt.gc.ca/pdf/Astebro_Gerchak.pdf (page 36)

mbesto• 14 years ago

You'd be in awe and I'd be an investor.

nicholassmith2• 14 years ago

For what it's worth Gruber was pretty critical of The Daily from the start, I think on mostly everything but pricing.

elteto• 14 years ago

Half a million dollars per week? What were they doing? Running their backend on gold-plated servers? No, seriously, how can you run so high with a digital distribution model? You are not even printing the stuff!!!

robryan• 14 years ago

120 staff. If the average wage was up around 80k+ with overheads you get a lot of the way there. Then you have fixed costs of office and the cost of actually reporting. Doesn't really surprise me at all.

They should take note that game apps haven't been sustainable on anything near that bloated an operation either.

If they were trying to run it on a much more modest staff, say 20, they would be profitable.

MatthewPhillips• 14 years ago

Probably stuff like sending people to Florida to cover a campaign, sending people to Cupertino to cover the iPad mini, sending people to Geneva to cover the Higgs discovery played more into the expense.

antidoh2• 14 years ago

Did they do their own reporting or just use Newscorp content?

jasonwatkinspdx3• 14 years ago

"Correlation is not causation"

Considering that no one presented statistical evidence of any form, I don't know what you're talking about John.

jopt4• 14 years ago

If you really don't follow, he probably refers to the con hoc ergo propter hoc argument of "this means tablet-native journalism is impossible!" What else could it be?

I get the feeling you're trying to be smug about something, but I don't really see what.

jasonwatkinspdx3• 14 years ago

I'm not feeling smug, I'm feeling tired of people using statistical concepts outside the context of statistical evidence.

I don't see anyone making an argument as extreme as saying that tablet native journalism is impossible. I do think people are suggesting that narrowing their market may have been a key factor in exhausting their runway, and I think that's a reasonable question to ask.

But no one is presenting any statistical evidence either way, so a concept like correlation plays no part. We can quote cute maxims all day in order to try to sound smart, but if they aren't applicable to the discussion, what's the point other than as theater: an attempt at rhetorical persuasion by performing familiarity with irrelevant concepts.

As a separate topic, if you'll indulge my own theater:

The phrase "correlation is not causation" is broadly misunderstood as being a stronger criticism than it is. My way of summarizing this is that "correlation is not causation, but causation causes correlation." For a fully rigorous and enjoyable treatment of how causal concepts relate to statistical evidence I recommend Judea Pearl's book Causality, which elaborates the concepts for which he won the Turing prize. If you don't have time for the book, the epilog is up on the web a few different places and is a great summary.

thezilch• 14 years ago

Speaking of smugness, throwing around Latin should probably include the proper Latin.

tnuc2• 14 years ago

As much as I disagree with some of Rupert Murdoch's politics;

Good on him for trying something new and failing. He is trying to sell his product and it failed.

And not only did it fail but he was straight enough to give us an idea of the costs and pitfalls involved in trying to run something like this. I wish others were as straight up with outlining their failures so we can all learn from them.

lostlogin• 14 years ago

He is not straight up in acknowledging failure. He is just quick to cut and run. Did you see any of the footage of him being interviewed about the phone hacking scandal? He is a mercenary liar and a cut throat businessman. There is little to admire in the way Murdoch behaves - ask Milly Dowler's family.

tnuc2• 14 years ago

>The Daily’s failure had nothing to do with it being iPad-only and everything to do with the fact that it just plain stunk.

iPad only?

http://learn.thedaily.com/android/

http://learn.thedaily.com/kindle-fire/

http://learn.thedaily.com/iphone/

sbuk2• 14 years ago

From the opening paragraph of article linked to by Gruber;

"he publisher of News Corp.’s The Daily said earlier this year that the iPad-only publication might need a few more years to be profitable. Today the company announced it won’t get that chance."

dangrossman• 14 years ago

Technically not iPad-only, but if you didn't have an iPad you probably couldn't subscribe. The iPhone version is only available if you own an iPad as well. The Android version is only available on two tablets -- the Kindle Fire and one Samsung tablet... and only if you bought that Samsung tablet from Verizon.

nglevin3• 14 years ago

I regret to admit to knowing this, but that's not correct. The subscription tiers were more like;

- iPhone + Android phone sub

- iPad AND iPhone + Android phone sub

Android phone is equivalent to Kindle Fire. I have no idea why the Kindle was promoted over the Android phone, but it wasn't originally conceived as an exclusive.

Even to this day, I have no idea how the Android tablet subscriptions were handled. It was a Verizon exclusive, it was preloaded for exactly one tablet and it couldn't be uninstalled. I don't even know how many tablets were sold like this, but I don't believe it was many.

The Daily for Android tablet did an impressive job of replicating some parts of UIKit for Android. Shame nobody saw it.

rdl• 14 years ago

I find The Economist's online edition to be technically good, and of course the content from that "newspaper" is great as well.

If you went no farther than The Economist's software, with $1mm/yr of writing focusing (as Gruber suggests) on opinion, news, and analysis, I'd be willing to pay $20-30/yr.

I would prefer something like Foreign Affairs, although slightly more timely (weekly or biweekly, vs bimonthly).

dgregd• 14 years ago

Maybe we should redefine what newspapers and journalists should do in Internet era.

Reporters from traditional magazines talk to interesting people, write articles and newspapers print them (of course I simplified things a bit).

But today I can directly connect to Elon Musk and Bill Gates twitter feed. I don't need any middleman to read blogs written by experts. How reporters can add value, do we really need them?

Yesterday I've got email from Vint Cerf about free and open web. The question is why this action isn't initiated by journalists?

gurkendoktor• 14 years ago

You only talk about positive celebrity news. In contrast, I think the most interesting newspaper stories are the ones that influential people do not want you to know about. I can follow my government's twitter account, but will they talk about how they are tweaking statistics to their advantage etc.?

tomjen3• 14 years ago

Properly not, but then so wouldn't most newspapers, most of the time.

That kind of reporting is expensive, both directly and indirectly (in terms of goodwill and access to politicians). Newspapers are burning too much money now that they no longer have a monopoly on news (and, more importantly, ads) so they have to cut costs -- and the easiest thing to cut is the kind of expensive reporting that we really need them for.

I am almost always downvoted when I say so, but the NYT is not a good paper anymore, it has become a rag -- it may still only print what is fit to print, but it has long ago stopped printing exactly the kind of news they should be printing -- and which I would have been willing to pay for.

mirzmaster2• 14 years ago

Sure you can connect directly to Elon Musk and Bill Gates, but is what you're getting from them fact? Are there any opposing views? Do you have all the context around what they may be saying? Getting your information from the horse's mouth is most valuable when you are getting all the information, ideally coalesced into a single place.

Augmenting a story with accountability and completeness is arguably the primarily responsibility of newspapers and journalists, especially in the Internet era.

_b8r0• 14 years ago

For a decent counterpoint, see here[1]. Ignore the pro-murdoch spiel in there, much as you'd hopefully ignore the apple sycopanthy from Gruber.

Personally I don't see the Daily as a failure. Of all the newspapers I see online in the UK, the only ones making money from it are the Times (with it's paywall) and so on. The Daily was a good experiment but ultimately would've suffered more from limited market sizes (why not web? why not android? why not every platform and a html5 backend?), but fundamentally I suspect what killed the daily off (at least for the UK) was the Times iPad edition. With it, Murdoch has a dead tree and online version and is making money from both. Thus, the need for the Daily (still running at a loss) to exist is gone, but you can bet that the Times iPad was definitely influenced by the Daily.

[1] http://www.kernelmag.com/yiannopoulos/3703/thank-god-for-mur...

antidoh2• 14 years ago

"that just stuff a newspaper into electronic form with the least effort possible, are doomed"

Oh, you've read the Denver Post. http://www.denverpost.com/

"A Media News Group web site." http://www.medianewsgroup.com/Pages/default.aspx

jccalhoun• 14 years ago

It isn't really an either/or. Yes The Daily's operating expenses were way too high but being limited to the ipad and a couple other devices didn't help things.

Why 'The Daily' Failed

Related Stories