Media World Awaits The Daily to Forge Model for iPad Content

NEW YORK (AdAge.com) -- In the coming weeks, News Corp. is set to unveil one of its more audacious content bets in recent years: The Daily, a newspaper designed for the iPad and the generation of tablet devices it inspired.

Conceived by News Corp. Chairman Rupert Murdoch, who negotiated directly with Apple CEO Steve Jobs, the publication breaks new ground in a couple of ways. First, it's one of the biggest bets on traditional journalism in years on any platform -- 100 writers, editors and designers have been hired for the project -- since Conde Nast sunk $100 million into Portfolio magazine.

Second, it will break the logjam that has bedeviled publishers attempting to move their subscription models to the iPad. Thus far, publishers have been reluctant to accept Apple's terms: a 30% cut of subscription fees and no subscriber data. But The Daily will sell subscriptions through Apple's App Store: 99? a week after a two-week trial, according to people briefed on the project, plus the ability to push new content to the app throughout the day. In a sign of how complex this is for Apple and for News Corp., AllThingsD reported the planned launch this week was delayed as the partners work out the kinks.

But one thing has fallen into place for The Daily: an impressive array of launch sponsors, including Macy's, Verizon Wireless, Land Rover, Pepsi Max and Virgin Atlantic, according to people close to those deals. In addition to sponsoring the project, they'll help The Daily get off the ground by offering incentives for their customers to download the app, such as frequent flyer miles from Virgin.

Apple has an initial exclusive window for The Daily, but over time the newspaper will be adapted to a fast-proliferating category of iPad-like tablet devices running Google's Android or operating systems from Microsoft, BlackBerry and Palm, now a division of HP. A good portion of the Murdoch clan, including Daily publisher Greg Clayman and newly appointed sales chief Christine Cook, were all at the Consumer Electronics Show in Las Vegas this month to take in the new devices.

Mr. Clayman was busy showing a demo of the iPad paper to ad agency chiefs and marketers (and spiriting it away from journalists) at a private dinner at Aureole in the Mandalay Bay Hotel, also attended by Mr. Murdoch, Lachlan Murdoch and Elisabeth Murdoch. "All these new devices don't mean much without content, and content doesn't mean much without brands," Mr. Murdoch said in his remarks.

The Daily will have a multi-story front page, but magazine-style layouts within, as well as graphics that take advantage of the iPad's capabilities in terms of rotating, pinching and swiping and video culled from News Corp. outlets. A promo graphic turned up by Damon Kiesow, digital media fellow at the Poynter Institute, reflects what people who have seen the prototypes say about the design: big use of photos in magazine-style layouts.

The design capabilities will extend to the ads. "We saw it in the development stage and thought it was highly innovative in terms of their use of imagery," said Porter Gale, VP-marketing at Virgin America. "This will allow us to use images that can be turned around in a 3-D motion and that's going to make it much more creative and memorable."

Verizon Wireless sees its sponsorship as an opportunity to strengthen its position among the Apple faithful; Verizon sells the iPad at retail and next month will start selling Apple's iPhone for the first time.

In part because the launch is being stage-managed by Apple, execs close to the deal see The Daily as possibly the best investment in terms of PR since the launch of the iPad itself. "For many of our clients, being part of the first viable property built for the iPad and not repurposed from print is interesting," said John Nitti, managing director of Zenithmedia, which represents Verizon and placed Chase Bank in The New York Times' iPad app last spring.

As launch partners, advertisers are paying a flat fee to be involved rather than the cost-per-thousand they usually pay for display media like ad pages or banner ads. That's to be expected: no one, not least Mr. Murdoch or his backers, have any idea what the size of the market for The Daily will be. "There is some hope it will scale but there are no expectations on the numbers they can deliver," said Andy Chapman, head of digital trading at WPP's Mindshare, which has one client participating in the launch and two others considering it.

The close association with Apple does not mean The Daily will be taking iAds; rather, all advertising on The Daily will be sold directly and served through New York-based mobile ad company Medialets, which is providing the technology for the ads as well as the metrics back to advertisers.

The question for The Daily is whether the content will be different and unique enough to warrant paying for -- and if enough people take the time to tell the difference. But because its content won't be indexed on the web and Google isn't -- yet -- indexing in-app content, it won't be easy to stumble upon content from The Daily.

Given Mr. Murdoch's enthusiasm for the project and his financial commitment, marketers are willing to join him in the bet. "This will be a good temperature check for the marketplace for what consumers' financial threshold is for good content," Mr. Chapman said. "We're all waiting to see where the audience gravitates."