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Murdoch plots dedicated iPad newspaper

Will need to grab a lot of fondleslab subs to break even

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News Corporation is launching a dedicated newspaper for Apple's iPad, according to reports.

Called The Daily, the operation will be based in Manhattan, employe around 100 staff, and launch early next year according to a predictably sniffy report from rival New York Times.

It's the first new product for the iPad from a major publisher. Despite the willingness of punters to pay for content via Apple gear - something the web has struggled to achieve in 15 years - publishers still view the iChannel as a way of promoting subscriptions to existing paper products, or delivering paper content electronically.

That's all quite rational - but what do the economics of an iPad-only bundle look like?

Reports suggest the price will be 99c a week, or $50 a year. Apple has sold 7.5 million iPads since launch, and was aiming for five million in the first full quarter since launch, but fell short. Still, with 28 per cent quarterly growth, it's impressive for a version 1.0 product that's still a premium consumer item.

iSuppli estimates that if we wind forward two years, there'll be a hundred million iPads around - and surely even more if Apple creates cheaper Nano-style fondleslabs.

Given the low price, and the size of the iPad market, the task looks daunting. The Daily would require over two million subscribers worth $50 a year to cover costs - and that's before Apple takes its cut. No daily newspaper can boast anything like that - but magazines are perhaps a better comparison than dailies here. (The Economist describes itself as a weekly newspaper.)

Newsweek and Time snag over three million paying punters a week and the New Yorker around one million. And if The Smithsonian magazine can snare two million customers, then surely The Daily must be in with a shout.

But it has to be distinctive, and that's the secret of the most successful British paper-gone-digital, the Daily Mail, which runs its web operation as a low overhead afterthought. The Mail's owners Associated Newspapers are confident that the web version doesn't cannibalise the paper version - yet it also draws a rubbernecking audience who wouldn't ever buy it for fear of being called politically incorrect. I daresay a fair few are even Radio 4 listeners. An enviable formula, for sure, but most people overlook the "low overhead" part.

One spectre haunting News Corp's iPad operation is that of the multimedia failures of the mid-90s, when publishers merely thought that adding a bit of video to some text would amaze the punters. It was vanity publishing, and was rapidly made redundant when the web took off.

Still, at least Murdoch has a strategy - and is thinking like a businessman. Neither can be said for The Guardian, alas.

"As for digital, I am with the utopians," said editor Alan Rusbridger in a rambling 6,000 word speech last week. Rusbridger mentioned Twitter 31 times, but offered no strategy on how to stem group losses running at around £470,000 a day.

Apart from a brief period in the mid-Noughties when News Corp appeared to drink the Kumbaya Kool Aid of Web 2.0, Murdoch has been leery of the promises of the snake oil crowd. And rightly so, it now seems. ®

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