In News Corp.’s quarterly earnings call yesterday there was good and bad news for the media giant – although mostly bad. TV revenues grew, movie revenues were reasonable, however Murdoch’s online division, which includes the likes of MySpace and The Daily, lost a massive $165 million in the first three months of the year.
Although the specific losses from MySpace haven’t been detailed, the zombified social network continues to shed users and advertisers at an alarming rate. News Corp. is currently courting buyers for the site, which is reportedly commanding an asking price of around $100 million.
The other big loser in this division was Murdoch’s fancy iPad newspaper – The Daily. News Corp. says the publication – which is distributed as an app on the iOS App Store – has been downloaded around 800,000 times which, if you recall, was the magic number Murdoch believed was required for the endeavour to be profitable. It was mentioned in the earnings call that The Daily lost $10 million in Q1, so obviously something is amiss.
Clearly not everyone who downloads the app subscribes to the $0.99 per week newspaper – in fact given recent evidence only a very small percentage do.
At launch Murdoch said the operating costs of The Daily would be $500,000 per week, which would put their total operating costs for Q1 at $6 million – although they managed to lose almost double that. Presumably the other $4 million loss is through publicity or unseen costs. Let’s not forget this is on top of the $30 million already invested to get the newspaper off the ground.
I was hoping to gain a bit more insight into subscriber figures through these quarterly results but that would appear impossible, as The Daily seems to be going backwards. News Corp. COO Chase Carey says the outlet is “a work in progress”.
Via MediaMemo
