(Updates share price in seventh paragraph.)
Sept. 28 (Bloomberg) -- News Corp.’s the Daily is averaging about 120,000 readers a week, or less than a quarter the number the company said it needs to make money, according to an advertising executive working with the iPad-only publication.
News Corp., whose Chief Executive Officer Rupert Murdoch personally introduced the publication about eight months ago, may have even fewer paying subscribers since people can read the Daily free for two weeks. The 120,000 figure is for so-called unique weekly visitors, which includes people who pay and those who don’t, said John Nitti, executive vice president of Publicis Groupe SA’s media-buying division Zenith Optimedia.
“They won’t tell us how many paying subscribers, but that’s how many uniques the Daily is getting,” said Nitti, who gets figures from the publication because he works with Verizon Wireless, a Daily sponsor that’s owned by Verizon Communications Inc. and Vodafone Group Plc.
Newspapers with circulation of about 120,000 include The Blade in Toledo, Ohio, and the Democrat and Chronicle in Rochester, New York, according to the Audit Bureau of Circulation.
The Daily’s audience is short of the 500,000 subscribers that Murdoch said in February would allow the publication to break even. After the free trial, subscribers pay 99 cents per week or $39.99 a year to read the publication.
‘Not Breaking Through’
Jenny Tartikoff, a spokeswoman for the Daily, declined to comment. News Corp. hasn’t disclosed subscriber figures, revealing only that it has been downloaded more than 1 million times as of the end of June.
News Corp. fell 57 cents, or 3.4 percent, to $15.92 at 4:29 p.m. New York time on the Nasdaq Stock Market. The stock has gained 9.3 percent this year.
News Corp.’s digital publication isn’t compelling enough to change people’s reading habits and its marketing push, including an ad spot in Super Bowl XLV, hasn’t created wide recognition, said Ken Doctor, author of the Newsonomics blog, which tracks technology and news.
“The Daily’s proving to be a great R&D experiment but probably not a viable business,” Doctor said in an interview. “It’s not breaking through the national noise.”
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.
News Corp. is expanding the availability of the Daily beyond Apple Inc.’s iPad. The company this month released a version for Facebook Inc. that offers a small selection of articles for free. The Daily will also be available on tablets that run on Google Inc.’s Android software in three weeks, according to two people familiar with the company’s plans.
Nitti said 120,000 readers is a respectable figure for the fledgling publication.
“We do value the Daily and what it brings to the table,” he said, pointing out that Verizon will continue to advertise with the publication. “It’ll be interesting over the next six months, without the launch buzz how engagement continues.”
Murdoch, who introduced the Daily before his media empire came under fire for phone-hacking at one of its London newspapers, has criticized the Web’s commoditizing effect on the news business and presented the iPad publication as an example of getting readers to pay for news, whether through ads or subscriptions.
“We believe the Daily will be the model for how stories are told and consumed,” Murdoch said in February.
The publication is helmed by Jesse Angelo, former managing editor of the News Corp.-owned New York Post, and has recruited former Page Six editor Richard Johnson and the New Yorker’s music critic Sasha Frere-Jones. News Corp. has also required readers to pay for online access to newspapers including the Wall Street Journal, the Times of London and the Sunday Times.
Jonathan Miller, head of News Corp.’s digital operations, said in February the company is aiming for a fifty-fifty split in revenue between subscription and advertising, though it would lean more heavily toward subscription dollars in the beginning.
The Daily is asking advertisers for $100 for every thousand people who view a page, several times the rate for most high-end publications, said Sarah Bachman, associate director at media- buying firm Horizon Media. The list rate is typically a starting point in negotiations, she said.
Murdoch’s effort with the Daily may show that established media brands, such as the New York Times Co.’s namesake newspaper or the Wall Street Journal from News Corp.’s Dow Jones, could have more success on tablet computers than new publications native to tablets, said Doctor.
“If you are Dow Jones, if you’re the New York Times, these are good times because you can get that brand and content out in so many different ways, and sell advertisers across devices,” he said. “But for an entity like the Daily, there’s going to be some difficulty.”
--Editors: Peter Elstrom, Ville Heiskanen
To contact the reporter on this story: Edmund Lee in New York at email@example.com
To contact the editor responsible for this story: Peter Elstrom at firstname.lastname@example.org