When he launched his iPad only newspaper The Daily earlier this year, Rupert Murdoch said it would need 500,000 readers to cover the $500,000 weekly operating costs plus taxes plus return on investment. It's getting nowhere near that which means Murdoch is losing a fortune on the investment. It's MySpace all over again.
Bloomberg reports that The Daily is getting only 120,000 readers and it's impossible to tell how many of them are paying subscribers. Bloomberg points out that this is on par with small regional papers like Toledo's The Blade and Rochester's Democrat and Chronicle.
The problem is that the iPad cannot save the newspaper business. As the consultants at Gartner point out, print and online are not generally regarded as direct substitutes by consumers. The time people spend reading on a digital screen is now almost equal to the time spent reading printed paper text, according to a recent survey by Gartner. Most tablet and iPad users say they find screen reading either easier than reading printed text (52 percent) or about the same (42 percent). However, 47 percent of laptop users find screen reading harder than reading printed text, and 33 percent reported it was about the same.
Some media executives are worried that digital media will cannibalize print media, based on the general decline in newspaper sales and take-up of online news services in many parts of the world. But the evidence from Gartner's research is that print and online are not generally regarded as direct substitutes by consumers. Which means something more complicated is going on. The bottom line is that the iPad won't save Murdoch or the newspaper business