Yesterday, News Corp. made what many publishing executives hope will be
one of the most important announcements in the annals of digital
publishing: the launch of the much-anticipated iPad publication, The

But while subscribing to The Daily is probably accurately described as ‘affordable‘ at 99 cents a week, or $39.99/year, producing the publication isn’t. News Corp. has confirmed that its investment to date is already a whopping $30m, and that The Daily will have a weekly overhead of $500,000.

Working with these numbers, the company would need some 750,000 annual subscribers just to recoup its initial investment. And to cover The Daily’s $2m in monthly overheads, News Corp. would further need over half a million monthly subscribers paying 99 cents a week.

This calculation, it should be noted, does not take into consideration Apple’s commission, so the number of subscribers required is actually higher, and is substantially so if Apple is receiving its standard 30% cut.

Unfortunately for News Corp. and Rupert Murdoch, the market is limited. Through September 2010, Apple had sold 7.5m iPads. Impressive for a new device in a new space, but hardly a massive market for publishers compared to the internet at large.

Even if we assume that number has jumped to, say, 15m, today, News Corp. would need just over 3% of the entire iPad owner base to purchase a subscription to The Daily to break even on a monthly basis pre-Apple commission. That figure is even higher if we limit the math to iPad owners in the United States.

If these numbers don’t seem daunting, consider this: The Wall Street Journal had approximately 414,000 paid digital subscribers in April 2010. That means that for Murdoch to see The Daily become a self-sustaining publication within his lifetime, he will need it to acquire more paying subscribers than The Wall Street Journal Online has. Possible? Perhaps, but I doubt the over-under would favor him.

Of course, Murdoch isn’t planning to rely entirely on subscriptions. He hopes that at least half of The Daily’s revenue will come from advertising. While there’s no doubt that many advertisers will buy into just about anything iPad related, one has to question whether Murdoch is going to be able to create a meaningful level of ad inventory without alienating subscribers, many of whom will likely be disappointed that a paid subscription doesn’t mean an ad-free experience.

In announcing the launch of The Daily, Murdoch stated that “new times demand new journalism” and “we believe The Daily will be the model for how stories are told and consumed in this digital age.” Unfortunately, it appears that Murdoch has missed the point: journalism itself is channel and platform-agnostic.

The problem for publishers engaging in journalism isn’t figuring out a new model for telling stories in the digital age as much as it is finding new business models that work in the digital age. The Daily may prove to be a shining example of exemplary journalism, but the business model of throwing huge amounts of money at staff and operations doesn’t look new at all.

Photo credit: bm.iphone via Flickr.