The problem here as I see it is the model. Murdoch apparently thinks that we still want a daily newspaper from a single voice, and that we are willing to pay for it. What he doesn't understand is that today's readers want to read the content they want from a variety of sources. The Flipboard app, for instance, creates a magazine-like experience on the fly from the sources you choose -- and it’s free.
Unfortunately for News Corp, as VentureBeat reports, it’s already invested an astonishing $30 million just to launch this thing, and it will cost another $500,000 a week to keep it going. While Murdoch says the right things about taking the presses and the trucks out of the equation to produce a leaner operation, I’m left wondering how many subscribers and advertisers it will take to make the initial investment back, never mind make it profitable -- especially with Apple taking half of the subscription revenues.
What really has to be troubling for the folks involved in this project is the short leash that Murdoch has given his experimental projects in the past. And make no mistake, this is one of his experiments. Writing on PaidContent, Evan Rudowski, co-founder of hosted Website platform provider SubHub, told the tale of iGuide, a 1995 News Corp. project he worked on with a similar mission to take the news business to the Web.
The parallels between the two projects are hard to miss, and it didn’t take long for Murdoch to conclude he was throwing good money after bad. Rudowski writes: “With no partner to help pay the freight at iGuide, Murdoch soon lost his resolve and shut things down - ironically right at the beginning of the dot-com bubble.”
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