All of Twitter seem to be gloating over reports that News Corp's (NWS) The Daily has been put "on watch" and that its future will be reassessed following the November election.
Most everyone has latched onto the $30 million figure that has been thrown around for a while as the cost to produce the Daily, rumored to have about 100,000 subscribers paying $39.99 per year.
I don't have any insider knowledge, but the $30 million appears to include vast start up costs. Yes, the Daily probably overpaid mobile design shops and others in getting to launch. And I'm pretty sure that they were the only app to ever buy a Super Bowl ad (just after launch). But when you look at what it has cost to bring new print brands to market, it doesn't seem that crazy.
Let's assume that the Daily's ongoing operational budget is $15 million with revenues in the $5 million range, for an annual loss of $10 million. To put that number into context, News Corp's film Avatar grossed nearly $2.8 billion (with a B) at the box office. That doesn't include licensing, DVD, streaming fees or other potential revenues. The Avatar DVD sold more than 400,000 copies its first week in France alone. That should more than cover a few years' worth of the Daily.
Of course, much of that changes with the split of the news businesses from entertainment. You can no longer rely upon the profits of the entertainment side of the business to fund news. But it's also worth keeping in mind that The Daily acted as a bit of a sandbox for the WSJ, the Post and other News Corp assets. The Daily has provided News Corp with a way to watch user behavior on tablets, explore more creative advertising and test out various subscription offers.
After two years, perhaps the time is approaching to shut down this sandbox test. But to look at the Daily through the prism of a typical online magazine is to miss the whole point. And many who seem to be enjoying its failure the most are those working for media organizations which cling to the traditional, dying model.
I rarely find myself in the position of defending News Corp, but I think dancing on The Daily's potential grave doesn't serve anyone in the content industry well.