The Daily’s rocky performance shows legacy brands create digital advantages

The News Corp’s launch of the tablet newspaper The Daily in February 2011 was heralded as the future of news and revealing opportunities for major new entrants in the news market. After a year and a half of operation, the digital newspaper has lost more than $30 million, managed to gain only 100,000 subscribers—not a trivial amount but low for a global player, and has just announced that it is cutting 1/3 of its editorial staff and ending original production of sports news and commentary.

Journalistically The Daily is not a bad news product and its app is facile and effective. So why hasn’t it been more successful? The fundamental problem is that the digital-only paper has been overshadowed by the success of legacy print newspaper brands in the market for digitally delivered news.

The Daily has never been so brilliantly written and edited that it could gain the significant attention and acclaim needed to overcome the brand advantages of legacy news providers. Major newspaper—such as The New York Times, The Guardian, and The Financial Times—have used the strengths of their reputations and brands to make the largest inroads in digital subscriptions. Concurrently, larger

local and regional players have also been grabbing paid digital customers in their markets and providing additional competition to the digital startup.

The Daily has also had to compete with widespread availability of free digital news from news providers such as BBC.com, CNN.com and aggregators such as Yahoo! and Google. These have all been successful in attracting consumers who are less attached to print news providers and paid services.

Those who predict the demise of legacy newspaper companies often forget the critical importance of the credibility and trust those companies have with news consumers and many assume that print organizations cannot transform themselves into digital players that may become so successful they may one day drop their print editions. 

Brands are important for habitual news consumers and they tend to be highly loyal consumers of specific news brands. The Daily has been unsuccessful in breaking that loyalty, but more successful in creating relationships with persons who have not been strongly bonded to legacy brands. It remains to be seen whether News Corp. will be willing to maintain a relatively small news digital brand among its holdings, even if it manages to move The Daily into operating profitability.

Why We Won't Pay for News

I recently forged my way the myriad of news reports on networks, papers, and web sites and discovered lots of attention-grabbing stories:

• Reuters had a story about the death of Mickey Rourke’ 18-year-old pet chihuahua.
• CBS News reported on cart that transforms into a sleeping tent for the homeless.
• Associated Press told me that Twitter was limiting message length and intending to start testing ways to make money.
• The New York Times informed me about people walking and running in stairwells as a means of keeping fit.
• CNN reported that Lance Armstrong’s stolen bicycle had been recovered.
• The Los Angeles Times reported on a city council candidate criticizing a rival for being defense attorney that represented a client who was accused of shooting a sea lion four years ago.
• ABC News carried a story on its website about efforts to produce cola containing cow urine in India.
• MSNBC reported that Starbucks is increasing the products its offers in offers as part of an effort to improve its performance.

Interesting? Yes. Significant? Hardly. Economically valuable enough to get people to pay for the news? Never.

Therein lies the problem. Most news organizations are still stuck in the get-the-attention-of-audiences, entertain-them-with-some-news-in-hopes-they-will-attend-to-serious-news-that advertisers-pay-for mode. They complain about declining audiences and use of news, but they are doing little to add value that makes it worth consumers paying for it themselves or spending time with it.

News as commodity; news for the masses; news that is fleeting; news that doesn’t provide significant intrinsic and extrinsic value will never induce readers, viewers, and listeners to pay for it. We are already paying what it is worth—little or nothing.