Forbes published an article a couple of days ago detailing some inside information they have on The Daily’s numbers – writer Jeff Bercovici says he has been told that they have had 500,000 downloads and out of these, 75,000 converted to regular users. I thought it might be interesting to do a bit of analysis on these numbers to understand how good or bad they actually are.
First, let’s make sure the numbers look right.
From our own experience with News360 for iPad (which spent a week in the 1st place of the Top Free News Apps list in the App Store), we know that being in the top 1 spot in news means you have at least 3,500 US downloads per day. To be in the 10th spot, you need about 1,500 per day. Here’s how The Daily was ranked from when it was released on Feb, 2nd:
Free Apps – Overall
Free Apps – News
So, the The Daily spent a whole month in 1st place in News, and a solid 10 days in 1st place Overall.
It’s difficult for me to say exactly how many downloads are needed to be 1st Overall, but extrapolating from our experience, I would guess (very conservatively), that at least 9,000-10,000 daily downloads are required. So, even with the most conservative calculations, The Daily had about 200,000 (100,000 during the 1st 10 days, and another 100,000 during the next 20 days) downloads the first month.
In March, they slipped from the 1st spot in news, but were still in the top 10 news/top 100 overall ranks, so it’s probably accurate to say they were seeing 2,000-2,500 downloads per day, which gives another 60,000-80,000 for the month.
So, for the two-month period we get about 270,000 downloads. Given that I think our estimates are on the conservative side (especially for the top 1 overall position), and that these are only the US App Store numbers, the 500k figure (which likely includes international downloads) seems to be on the high side, but more-or-less believable.
What this means
In the Forbes article, Jeff says that The Daily would need about 750,000 subscribers to break-even. Their retention rate looks to be 15% (75k users out of 500k downloads) for free content. Now, this could be a little higher as we go along, since a lot of people likely downloaded the app “just to check it out” at launch, with no intention of using it regularly.
Anyway, let’s assume that 30% of the active users are going to convert to paying subscribers – this is probably a large overestimation, but we’ll use it for argument’s sake. That means that out of the current 75k users, 22.5k will start paying for the content.
So how quickly can The Daily reach its break-even point?
Let’s do some highly unscientific calculations – in two months, including its highly publicized launch, The Daily managed to sell about 22,500 subscriptions. If this pace is held, they will need another 2.5 years to get to 750,000 subscribers and the break-even point. Of course, the amount of devices out there is going to be increasing substantially in the years to come, but looking at the graphs above, it still seems doubtful The Daily will be able to match its launch in terms of downloads & publicity.