In Depth

The Daily, News Corp.'s Ambitious Plan to Create a Newspaper for Tablets, to Shut Down Dec. 15

By Nate Ives
Advertising Age

News Corp. said on Monday that it is shutting down The Daily, its ambitious but expensive attempt to create an iPad newspaper, on Dec. 15.

Following layoffs of a third of its staff this summer, The Daily employs roughly 100 people. A News Corp. spokesman said the company has begun a process in which Daily siblings such as the New York Post will try to offer opportunities to Daily employees.

The decision follows a 22-month effort that delivered both some significant achievements -- developing the iPad as a publishing platform, for example, and accumulating 100,000 paying subscribers for a brand-new product -- but seemed to stall out at a time when its parent company was becoming less able to indulge a length investment period.

Observers will debate whether the ultimate problem was the editorial execution, which may have proved a bit generic for a product that consumers had to pay for, or the relative lack of tablet penetration among consumers. Both factors contributed to the iPad's difficulty reaching cruising altitude fast enough for News Corp. More than 54 million people in the U.S. use an iPad at least once a month, but they remain just 16.8% of the population and 22.2% of people on the internet, according to eMarketer. That put a hard cap on the number of subscribers The Daily could acquire no matter how solid its product.

But The Daily may also have become collateral damage from the hacking scandal at News Corp.'s U.K. newspaper unit, which encouraged Chairman-CEO Rupert Murdoch to split the company into an entertainment operation and a publishing concern. Without the cover of entertainment profits, the newspapers spin-off is going to have a harder time sustaining money-losing properties.

Mr. Murdoch said The Daily's audience was not coming along quickly enough. "From its launch, The Daily was a bold experiment in digital publishing and an amazing vehicle for innovation," he said in a statement. "Unfortunately, our experience was that we could not find a large enough audience quickly enough to convince us the business model was sustainable in the long-term. Therefore we will take the very best of what we have learned at The Daily and apply it to all our properties."

Word of the shutdown for The Daily came as News Corp. revealed further details about its upcoming split. The company named Robert Thomson, who has been managing editor of The Wall Street Journal and editor-in-chief at Dow Jones, to lead the publishing spin-off as CEO. Gerard Baker, deputy editor-in-chief at The Journal, will succeed Mr. Thomson as managing editor of The Journal and editor-in-chief of Dow Jones.

News Corp. also said the publishing spin-off will keep the name News Corp. while the entertainment company becomes Fox Group.

The Daily's editor-in-chief, Jesse Angelo, was named publisher at the New York Post, succeeding Paul Carlucci, whom News Corp. said will now focus exclusively on his role as chairman of News America Marketing. The Daily's publisher, Greg Clayman, was named to oversee global digital strategy at News Corp., remaining with the publishing company after the split.

The Daily has fascinated much of the media business since its introduction at a February 2011 press conference, where Apple executive Eddy Cue joined Mr. Murdoch, Mr. Angelo and Mr. Clayman on a stage at the Solomon R. Guggenheim Museum in New York. That was partly because of the unaccustomed spectacle of a newsroom hiring journalists as quickly as possible. But it was also The Daily's combination of three media obsessions: Mr. Murdoch, Apple and a possible way forward for journalism.

That fascination seemed to become a drawback, however, as growth slowed and negative rumors accumulated. A report this summer held that The Daily would be "reassessed" once the country voted Nov. 6, thus concluding the national news event of the year.