The Daily Announces First Quarter Results: Big Loss

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Remember when we were all abuzz about The Daily, the first ever newspaper for the iPad? And then we didn’t hear much of anything about it? Well, there might be a reason for the lack of hoopla following its somewhat checkered release–they lost a pretty good chunk of money. How much? Fully $10 million.

The Daily, a sort-of co-production of Apple and News Corp, owners of Fox and a whole bunch of other media properties, reported the $10 million loss in its first operating quarter. And perhaps worse yet, they’ve reported a grand total of just 800,000 downloads so far. Just to add insult to injury, due to their business model, that 800,000 downloads figure doesn’t equate to the total number of paid subscribers involved, but rather a mix of subscribers and people who buy individual copies.

Costs involved turn out to be staggering: the launch costs alone were, reportedly, $30 million, while regular production costs land somewhere in the neighborhood of half a million a week, likely owing to the fact that The Daily employs over 100 people, between the writers and the various programmers getting all that writing into iPad format.

It’s a little disconcerting, but then, startup costs for any new venture are substantial and profit isn’t always immediate. This first quarter may have been a downright disaster for The Daily, but I can’t imagine it being permanent. We all know how well epublishing in general is doing these days, though the concept of regular updates may be too much, especially considering the amount of specialized graphics and attendant programming required.

A leaner production may serve The Daily better, but still, I’d keep a watch on this one. A bad first quarter doesn’t spell the end of an entire venture, and they’re still in there swinging. They may pull it out, or retool, but I doubt The Daily will be gone any time soon.