After less than two years in existence, the first mobile only newspaper, the Daily, will close for good. The News Corp. press release stated that "As part of a digital restructuring initiative, the company will cease standalone publication of The Daily iPad app on December 15, 2012, though the brand will live on in other channels. Technology and other assets from The Daily, including some staff, will be folded into The Post."
This ends months' long speculation about the faith of the battered publication and opens many questions for the future of digital print. According to Bloomberg, the app reached about 120,000 active users each week and cost 99 cents per week or $39.99 a year. Readers spent approximately 20 to 30 minutes a day with the app.
As in any digital story, execution may be a key part of the problem. The Daily app platform was buggy from the start and while user experience stabilized, the back-end of the custom-built system continued to be a headache. In contrast, the New York Times, the most notable competitor, has accumulated 224,000 paying online only subscribers (excluding people on freebie accounts sponsored by Lincoln). Integrated branding and positioning has helped drive growth, however, this is still short of the 500,000 subscribers that the Daily estimated that it needs to be profitable.
Another stated issue was that the user experience did not live up to the expectations. The app was recreating a newspaper or magazine look and feel contrary to what users were looking for in the Daily. It lacked the kind of rich media features that could differentiate it from a paper experience. It was also terribly uncreative with monetization approaches and pricing.
The bottom line is that integration and scale are still defining parameters for publishers even in a mobile and digital world. Digital only will be a tough strategy to implement profitably. While print costs will continue to go up, purely driven by raw materials, digital production is also becoming more expensive, at least in short term. Users are increasingly expecting online experiences that are highly interactive and thus costly. Just think of the dynamic visualization techniques possible online vs. static print showcased in the recent US elections. Scale will be critical to share such production costs.
Therefore integration will continue to be a key. Users expect multiple engagement models across channels and are likely to use several channels. It appears that whatever new model comes along, monetization is slow to catch up. Digital dimes and mobile cents are becoming clichés, but are unfortunately true. Advertisers are thinking of new models to reward engagement vs. the old impression models, but proven models are years away. Until then, successful publishers will need to think and execute a multi-channel strategy extremely well to manage growth and profitability. Back-end platforms, monetization approaches, and even user experience integration will mark the winners. And yes, paper will be here for some time.