Newspapers Making a Kindle-Killer?

Electronic-newspaper It's no secret that newspapes have hastened their own downfall with poor decisions and some ridiculous, even illegal ideas (like massive price collusion).

But, they might now be getting into the act. The Wall Street Journal reports that they're exploring a Kindle knock-off designed to read newspapers and magazines:

Hearst Corp., which publishes the San Francisco Chronicle and Houston Chronicle as well as magazines including Cosmopolitan, is backing a venture with FirstPaper LLC to create a software platform that will support digital downloads of newspapers and magazines. The startup venture is expected to result in devices that will have a bigger screen and have the ability to show ads. 

Gannett Co.'s USA Today and Pearson PLC's Financial Times are among newspapers that have signed up with Plastic Logic Ltd., a startup that is readying a reading tablet, the size of a letter-sized sheet of paper, that can displays books, periodicals and work documents. The device, which uses digital ink technology from E Ink Corp., the same firm behind the Kindle, is slated to be rolled out by early next year, and will offer publishers the chance to include ads.

The article also mentions that Apple and News Corp are each exploring their own versions of such a device. 

To the extent that these will offer plausible competition to Amazon, I'm all for it. Not that we've seen Amazon do anything too bothersome yet, but it doesn't help anyone (except Amazon shareholders) to have one company run off with the lion's share of the e-reader market.

And in many ways, an e-reader that focuses on periodicals makes a lot more sense than one that focuses on books.

It's also interesting to see that for all Jeff Bezos's touting of Kindle sales figures, the periodical circulation via Kindle is abysmally low:

The Wall Street Journal — the second-most-popular newspaper for the Kindle after the New York Times — has more than 15,000 subscribers, according to a spokeswoman for the paper, compared to its paid circulation of more than two million daily. Fortune magazine has roughly 5,000 subscribers, according a person familiar with the matter, while the magazine has an average print circulation of nearly 866,000.

I think the basic message here is: hold onto your money for now. The e-reader market is going to see a lot of change over the next few years, and unless you absolutely need one right away you'll probably end up getting something better suited to you, and cheaper, once things have time to develop some.

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“Not that we’ve seen Amazon do anything too bothersome yet,”
I think the current method in which Amazon has been handling content producers is a fair bit bothersome. Individual authors who sell through Amazon get a 35% net price return, where as publishers typically get around 50% of the net price, and authors typically only get 10 to 15% from which 15% then goes to an agent.
If you then look at the Senate testimony of Dallas Morning News Publisher and CEO James Moroney, the best deal Amazon would offer his paper for the new Kindle DX was 30% net and Amazon retained rights to sell in other platforms.
It seems that between the Kindle Store and the Kindle devices, Amazon is looking to control the largest parts of the supply chain and then rely on individual and independent content providers.
In that instance, the more reading devices, the better, as long as they adopt a single (or at least a dominate) file format which can be played on most (if not all) devices. If publishers don’t, they likely find themselves at the mercy of those who do provide the content stores and reading devices. Amazon is tipping their hand in that direction already.

“It’s also interesting to see that for all Jeff Bezos’s touting of Kindle sales figures, the periodical circulation via Kindle is abysmally low”
Don’t overlook the possibility that people have lost interest in the way in which news is presented in a newspaper (whether on paper or a really cool e-reader). I subscribe to a half-dozen news RSS feeds and just click through to stories that look interesting — far more efficient and worthwhile than thumbing through a single, filtered news source (like a newspaper, print or electronic).
These companies may be creating a solution in search of a problem.
What works for books may not work for newspapers…or magazines.
Walt Shiel, Publisher
Slipdown Mountain Publications LLC

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