A new product built for a new medium. Rupert Murdoch is not the world’s most revered media mogul for nothing. He has a habit of getting things right; eventually, but not always immediately. And unlike so many modern media companies, he is willing to innovate, invest and take risks. There are plenty of gloaters pointing to MySpace. But these pundits become amnesiastic when it comes to Sky. Mr Murdoch bet his shirt, and the shirt won; big style. He is the world’s master at managing what we consultants call the “Boston Matrix”, the process of managing cash flow and investment through a company’s range of products.
Which is one reason why he can afford to invest a relatively small $30 million on entering the iPad frenzy.
What is fun about the criticism currently, is that it is completely inconsistent. One report talks of great technology, lacking of stories. Another bemoans that great content is being let down by slow technology. This says to me that the jury is out. A great experiment is in play.
So let’s analyse the potential. First of all, 15 million iPads were sold in 2010, a figure expected to reach 40 million a year over the next four years. Judging by the over 5,000 apps that are now available, a lot of people have high expectations. In addition, a lot of publishers are reporting very positive results, with newspapers in the USA reporting higher levels of conversion and retention for their tablet based subscriptions, than those in print. In France, publishers have told me that their research shows that tablet readers read their digital service for nearly as along as their print product, compared with only around five minutes for the internet service. Amazon reported some time ago, that if a book is available in tablet form, then one in three sales are electronic.
My enthusiasm is tempered by a number of references to the fact that the initial explosion in adoption has slowed particularly in magazine tablet downloads, but to some extent that is inevitable, as the market relies less on servicing a large pool of early adopters and increasingly has to rely on the expansion into the mass market.
Turning now to The Daily strategy. Much of it is line with three trends that will increasingly dominate our industry. The first is inevitably technology. I’ve complained regularly that, sadly, print is being ignored, and that it will continue to provide the majority of profits for many years, because internet audiences are thin and fickle. The tablet concept offers a bridge between the two worlds, and is interesting because of that. The second trend is toward magazine presentation. The world’s greatest newspaper is arguably the Economist. France and Spain’s most successful free daily is 20 minutes, a picture heavy A4 publication. This is a demonstration of this trend. The third trend, which surprisingly to date News Corp have not played a part in, is that of content aggregation. Apparently 100 staff are working on The Daily, not a large number, but much of the content looks agency sourced. Given the cacophony surrounding Mr Murdoch’s attempts to buy Sky outright, aggregation is probably not a card to play today, but the product concept and technology is wide open to aggregation and cross promotion. This will then open up a range of marketing, production diversification, and internationalisation opportunities… But we’d probably best keep that a secret for now.
