Rupert Murdoch’s ‘The Daily’ news app for iOS was touted as being the next big thing in new media when it launched a couple of months ago. Therefore we’d doubt very much that Mr. Murdoch was expecting a monumental loss in its first quarter on sale equating to £6 million ($10 million). So why has it made such a high loss?
If you take into account the daily running costs and the $30 million invested in setting up the infrastructure, advertising and roll out of the app then a $10 million loss in the first quarter doesn’t actually sound that bad.
Where’s the loss?
A recent statement explained that it costs $500,000 a week to run The Daily, so some simple maths tells us that they must have made roughly $9 million per month in the first quarter creating $27 million dollars in sales, subtract the $30 million in start up costs and then the running costs and it explains the initial loss. Now that these start up costs have been paid for the News Corp brand are set to rake in a tidy profit going forward. This calculation is of course taking into account the initial $30 million investment.
It’s hard to deny that The Daily has been popular, amassing 800,000 downloads is no cakewalk but what’s still unclear is how many of these downloads have been converted into paying subscribers. So for the time being The Daily is making a loss that News Corp will hope to turn into profit before the year is out, if not before the Android version comes out later this year.
Have you upgraded to a paid subscription of The Daily?