Peter Kafka

Recent Posts by Peter Kafka

The Daily Is Doomed! the Daily Is a Hit!

The Daily’s formal debut is in a few hours, at which point we’ll have no shortage of pro/con opinions about News Corp.’s new iPad newspaper.

But until then, here are the reasons the Daily won’t work, followed by the reasons it will. They’re both from the same guy–Stifel Nicolaus analyst Jordan Rohan. From his note published yesterday:

CONS:

1. Consumer Acceptance Could Take Time: Nobody really knows the future of the iPad daily, and the official launch party is not “where the rubber meets the road” in terms of understanding consumer acceptance of such a new concept.

2. Hype or Reality?: Hype does not necessarily translate into market share, revenue, or cash flow.

3. Control: Apple tends to control its environment so tightly that there may be clashes down the road with apps offered by Yahoo!, Google, Facebook, AOL, Amazon, and a host of other Internet companies. This could reduce overall profit potential for iPad publishers.

4. Understanding the revenue model will be key. Online ad networks and other intermediaries could be left on the outside, looking in, if the iPad remains a premium offering with high CPMs. The subscription model is somewhat irrelevant unless it scales to support a vibrant advertising environment. We will have to wait and see on that key point.

PROS:

1. Product Differentiation: News Corp could marshal the resources of its newspaper, cable television, studio, and Internet divisions to differentiate the product from most other companies.

2. Apple is a powerful ally. The recent track record of product innovation and commercialization at Apple is unmatched. If Apple is willing to throw its weight behind this initiative, along with News Corp, then the chances of success are high.

3. Playing Offense: If News Corp can make an iPad daily work, then other media companies will begin to play offense as well. And that is generally a good thing for innovation, and ultimately for advertisers and marketers alike.

4. Makes More Sense than Wired for iPad: Mid last year, we attended a pre-launch event for Wired magazine’s iPad initiative, which Conde Naste marketed at a surprising $5 per copy. The product was beautiful, but results were mixed at best. And it was a monthly, not a daily, which implied that the frequency of visitation was much lower.

Rohan, by the way, is ultimately bullish on the Daily, and he was that way before he got a look at the thing at Rupert Murdoch’s apartment last night. Now he’s very, very bullish, but he’s been embargoed from talking about it until noon today.

The Daily’s formal unveiling will start an hour earlier, at 11 am ET, and I’ll be liveblogging then; check back here in a bit for a link.

Until then, you can check out this preview from CNN, which got an “unofficial sneak peak” [sic] at the Daily. Spoiler alert! It reads a lot like the preview I ran yesterday, written without the benefit of any peaking [sic].

(Disclosure: This site is also owned by News Corp. Which didn’t get me an invite to Murdoch’s party or, per above, any advance look-sees).


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