�Nearly six months after the first rumors of an iPad-exclusive news publication from News Corp. (NYSE:NWS) began circulating, The Daily is here. News Corp. CEO Rupert Murdoch said the online newspaper will become “the model” for the news business as consumers turn from print and television to devices like Apple’s (NASDAQ:AAPL) popular tablet.
It may also become the model for future battles between Apple and content publishers.
The Daily certainly looks like the future � it features news, sports, entertainment, and opinion in a multimedia format including audio, video and even photography that can be viewed in a full 360 degrees.
And the price should appeal to the 15 million users who already have an iPad � the cost of 99 cents a week (or $40 a year), falls into the pricing sweet spot that so many app developers have exploited on Apple mobile devices. The blending of attractive technology, populist content, and low cost could stand to help the imperiled newsprint businesses finally make their permanent digital transition.
Apple, of course, will receive the greatest rewards for The Daily‘s success. The publication will be the first product sold through its online app store to use a recurring billing payment method, with users downloading an app that charges a credit card as it updates on a scheduled basis.
Apple already takes a 30% cut of each sale through the app store, meaning that new constant streams of revenue will only increase the profitability of its digital retail operation. The app store alone generated $1.1 billion in revenue last year.
The other feather in Apple’s cap is the technology used to build The Daily. Although Murdoch confirmed that the �paper� will eventually be released on multiple platforms, it’s well known that Apple helped develop it, meaning the company has proprietary digital publication tools it will undoubtedly be willing to license to others.
If The Daily does indeed become “the model” for newspapers and magazines on connected handhelds, publishers around the world may become uncomfortably beholden to Apple � and they�ve already clashed with Apple over revenue splits and other issues when publishing iPad editions of magazines. Time Warner’s (NYSE:TWX) well-publicized scuffle last year over the distribution of Time Inc. publications like Sports Illustrated resulted in the company’s iPad editions being barred from the App Store completely, relying on independent sales through its own websites.
Time Inc. was rumored to have balked at Apple’s terms that demanded not just the 30% share of sales but also the disclosure of Time Inc. subscriber information.
A Wall Street Journal article on Thursday suggests that publishers won’t have such an option in the future. Apple now requires all app developers, regardless of product category, to include an App Store payment option alongside their individual alternatives.
How long will it be until Apple fully bars publishers like Time Inc. from offering independent pay models? How long until is begins requiring digital newspaper and magazines to incorporate proprietary technology as part of its efforts to more heavily integrate the App Store into �in-app� sales?
The Daily may not just be the future of digital print — it may mark the beginning of a new war between Apple and publishers.
At the time of publication, Anthony John Agnello did not own a position in any of the stocks named here.
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