With The Daily, News Corp and Apple try to shake up the news business model

Rupert Murdoch is the biggest man in media. Apple is one of the hottest companies in tech. The two have teamed up to make a run at a new kind of news organisation, creating a tablet-only paid product that could reinvent the news subscription model.

Called The Daily, Murdoch’s brainchild staffs more than 50 top-tier journalists and will only be available as an iPad app through at least 2012. The News Corp. CEO introduced the product to mixed reviews at the Guggenheim Museum in New York City on Wednesday morning.

“New times demand new journalism,” he said. “The devices that modern engineering has put into our hands demand a new service edited and designed specifically for them. Simply put, the iPad demands we completely re-imagine our craft.”

As it turns out, The Daily is less about re-imagining journalism as it is about reworking the business model.

The Daily tries to do this in a few different important ways. First, it is not available anywhere but the iPad. Although content can be shared via Twitter, Facebook and e-mail, you must have the app to view the content. So while it’s not exactly closed to the internet, The Daily puts a great premium on the iPad platform.

Second, this is a true walled garden: If you want to get the news, you have to pay the fee (40 USD per year). After the two-week free trial is over, no more freebies.

Third, a shocker: The Daily may not need printing presses, newsprint or delivery trucks, but it is built a whole lot like a traditional newspaper. It will cover the gamut of verticals, from breaking news to sports to entertainment. And, it will carry an editorial voice set by an editorial board, much like a mainstream media outlet.

But don’t expect the content to be flat. Murdoch has brought in talent from television and the Web to create engaging video pieces and interactive graphics. The layout of The Daily emphasizes large, crisp photography and lots of audio. It’s easy to swipe between article thumbnails or zoom in for a closer look.

There is no shortage of advertising, with pre-roll videos embedded throughout the app. The jury’s still out on the quality of the news itself, but so far, so good.

With bureaus in New York City and Los Angeles to begin with, The Daily is a very US-centric organisation.

“Our target audience is the more than 50 million Americans who are expected to own tablets in the next year or so,” Murdoch said in New York.

News Corp.’s experiment will reverberate around the world, however. With $30 million behind The Daily and more sure to come, Murdoch looks ready to spend big to make this venture a success. His company has had some famous failures on the Web (see: MySpace) but sees a different kind of opportunity with tablets.

“We can and we must make the business of newsgathering and editing viable again,” Murdoch said.

In an interview with Neil Cavuto on Fox Business Network, he said he predicts tablets like the iPad, Samsung Galaxy and Amazon Kindle will soon displace laptops.

“I think this is the end of the laptop,” Murdoch said. “Here we have the man [Steve Jobs] who invented the personal computer, then the laptop. He’s now destroying them. That is an amazing life.”

News Corp. has been simultaneously investing in tablets and paid content in the past year, showing a clear business strategy for the multibillion dollar giant. In June of last year, Murdoch purchased Skiff LLC, an e-reading platform developed by rival publisher Hearst Corp.

At the same time, he announced an investment in Journalism Online LLC, a company which helps publishers extract more revenue from their audiences. Murdoch has advocated loudly for stricter pay models for the news industry, railing against search engines and aggregators.

In April of last year, Murdoch said consumers would eventually be forced to pay for their news.

“I think when they’ve got nowhere else to go they’ll start paying and if it’s reasonable—no one’s going to ask for a lot of money.”

So far, consumers have consistently declined to pay even small amounts for Web content, excepting financial publications like The Wall Street Journal and Financial Times. The Daily’s prospects for success will become clearer mid-month, once the free trial has expired and News Corp. discovers just how many people are willing to pay for their product.

The odds are against them, however unique an iPad-only news organisation may be.



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