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Stop the presses: First iPad newspaper debuts

Andrew Vanacore | 2/8/2011, 6:24 p.m.

NEW YORK - Rupert Murdoch’s News Corp. launched the first iPad-only newspaper last week. It is hoping the right combination of traditional reporting and technological wizardry will lure enough subscribers and advertisers to pay for a new way of delivering journalism.

News Corp. plans to charge 99 cents per week or $40 per year for the newspaper, called The Daily.

That’s less than what many publishers charge per month for home delivery of newspapers, though The Daily won’t be burdened with the cost of printing or delivering a physical newspaper.

The digital newspaper is produced by reporters in New York and Los Angeles and a network of freelancers. It will be broken out into sections including News, Gossip and Opinion and delivered to subscribers on their iPads each morning. Each edition will have as many as 100 pages the size of an iPad, which measures 9.7 inches diagonally. Content will be updated, though not as often as a website.

“There’s a growing segment of the population here and around the world that is educated and sophisticated, and they’re not reading national newspapers or watching much television news,” Murdoch said during a launch event at the Guggenheim Museum in New York. “But they do consume media. And they expect content tethered to their specific interests delivered anytime, anywhere.”

The Daily is the latest example of how media companies are trying to mine the iPad’s popularity for new sources of revenue. Many publishers already have free or paid apps as an add-on to their print editions.

Newspapers have been eyeing digital opportunities because the print advertising revenue they have traditionally relied upon has been evaporating for the past four years. Advertising revenue from newspaper websites has been growing, but it's a fraction of what print brings in.

News Corp. hasn’t been as hard hit as many publishers because of revenue coming from its Fox television network and the 20th Century Fox movie studio. News Corp. also owns The Wall Street Journal, one of the few newspapers able to sell a large number of digital subscriptions.

Still, Murdoch referred to the crisis facing the news business Wednesday, saying, “We can and we must make the business of news gathering and editing viable again.”

Though it is too soon to predict how The Daily will fare financially, Murdoch said News Corp. spent about $30 million to start the project. Operating costs will run roughly a half million dollars per week.

So to break even on annual subscriptions alone would require a customer base of almost 1 million readers, assuming Apple Inc. takes its typical 30 percent cut. That would put The Daily among the top circulating newspapers in the country.

Advertising dollars will help support The Daily as well, though how much is not yet known.

News Corp. Chief Digital Officer Jon Miller said readers will be the main source of revenue for The Daily at first, but eventually the company would like to see a 50-50 split between subscription and advertising. It is counting on marketers to pay more to reach readers who are engaged enough to pay for a digital newspaper. Verizon Wireless is sponsoring the newspaper’s launch, allowing News Corp. to give readers two weeks for free.