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Media executives around the world are holding their breath. Rupert Murdoch's bold and risky bet on the iPad is on the way. The ultimate hope: it will prove that the iPad is a viable platform for profitable content distribution. A big part of the 'profitable' part: paid content.

But media executives might not want to hold their breath for too long. According to research firm Knowledge Networks, consumer expectations on the iPad look a lot like consumer expectations on the internet.

Of consumers surveyed by Knowledge Networks, a whopping 86% said that they'd prefer to trade their eyeballs instead of money to access iPad content. In other words, they prefer ad-supported content to paid content.

That's obviously not great news for the Rupert Murdoch's of the world, and it only gets worse: of the 13% of consumers surveyed who indicated that they'd pay for content, on average they'd only be willing to pay $2.60.

If the results of this survey accurately reflect the general marketplace, Rupert Murdoch's The Daily is probably destined to end in a spectacular flameout. For starters, AdAge is reporting that The Daily will cost 99¢ per day after a free two-week trial.

As one commenter points out, that's a hefty amount annualized. Given the amount of free content available that is probably largely indistinguishable from what The Daily will offer, one has to wonder if Rupert is aiming too high. After all, at 99¢ per day, The Daily will cost more than many other online subscriptions, including a subscription to established and finance-oriented Wall Street Journal Online.

But even more important than price is the business model: as AdAge details, The Daily will have a bevy of prominent sponsors (read: advertisers) at launch. The question: if consumers have largely come to view the viewing of ads as a form of indirect payment for content in the online environment, why would they pay for an iPad newspaper that's going to feature ads from brands like Macy's, Verizon Wireless and Pepsi?

Perhaps Murdoch's big bet will prove him to be a visionary, but media executives without his audacity (and bank account) might be wise to take a different approach: follow the trends, don't try to change them. Consumers prefer free content, and if they're going to pay for content, they expect that they'll be able to access it on the platform of their choosing. The iPad isn't going to change that.

Patricio Robles

Published 18 January, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)

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Paul Keers, Axon Publishing

"Given the amount of free content available that is probably largely indistinguishable from what The Daily will offer" - that's a bit harsh before it's even launched, isn't it?

OK, so the raw facts behind the news may be obtainable elsewhere, but if News Corp have invested in quality from the editorial analysis to the design and presentation, there's no reason to assume that The Daily will simply echo other digital publications.

over 5 years ago

Ed Stivala

Ed Stivala, Managing Director at n3w media

It would be interesting to know more about the survey sample used by Knowledge Networks. How large a sample, what were the demographics and what was the method used. Without knowing that I would find it hard to assign any significance to the results. 

over 5 years ago

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