Monday, February 6th, 2012

'The Daily' Is 'On Target' to 'Break Even' in 'Five Years'

Here's today's fascinating and maybe really unlikely media assertion from the Times: "A $30 million tablet-only news publication… with 100,000 subscribers paying 99 cents a week or $39.99 a year, and 250,000 unique readers each month, The Daily is on target to break even in five years."

Hooray! They made it! Just five short years to breaking even. Well, it… could be.

"News Corp. has spent $30 million on development (which has been 'written off') of The Daily and current costs are less than $500,000 per week," according to Folio, a year ago. Okay, so maybe if you attributed the original $30 million to News Corp. itself and disregard it, that's… possible. Business Insider: "Add $30 million to startup and $26 million per year, and The Daily cost $56 million to run in year one." Now, I don't think it came to that; I think the $30 million was more like start-up costs and two years of budget. Even so: Nieman Journalism Lab estimated "$13.5 million in annual staff costs," at 150 employees. (But I think it's fewer than that, more like 100 employees. So correct that downward to… $8 or $9 million.) In the end, even ditching the $30 million from the balance sheet (which most media companies don't exactly get to do), and skewing the staff downward and then assuming that all 100,000 subscribers are paying full freight, that's still only conceivably at most $5 million a year in subscriber revenue. (I'd be charitable and throw in another million a year for web advertising, but the only ads I ever see on web content are for The Daily itself.)

So by what possible metric can the Times make the claim the paper is "on target to break even in five years"? ("On target" being a favorite vague-ism.) What possible growth trend forecast do you have to buy from the publisher to accept that as fact?

7 Comments / Post A Comment

BadUncle (#153)

Maybe they have a wine club? Or regular bake sales?

deepomega (#1,720)

When Romney is elected president, purchasing an iPad 3 and a subscription to The Daily will be legally required, as an economic stimulus package.

SeanP (#4,058)

@deepomega and the silence will be deafening from the crowd who says stuff like "making people buy health care is soshulizm" and "but people want the freedom to die in the gutter rather than be forced to get subsidized health care" (yes, someone actually said something very much like that in some online discussion I took part in).

Does it really take $30 mill to craete a news reader?

stuffisthings (#1,352)

OK, so let's say on launch day they have 100 subscribers (the employees). By the end of year one, they have 100,000 subscribers — so 100,000% growth. If that trend continues, by the end of Year 2, they are up to 100 million subscribers, and by the end of year 5, every person on Earth has approximately 14,286 subscriptions. Profit!

John Gorenfeld (#3,560)

Some journalists who came to The Daily in the hope of writing substantial articles grew frustrated with its tabloid format, according to several former employees who would not discuss The Daily on the record.

Due to The Daily's draconian contributor contract.

Lockheed Ventura (#5,536)

So by what possible metric can the Times make the claim the paper is "on target to break even in five years"?

If the entire newsroom contributes to the Mega Millions pool, obvs.

Post a Comment