Associated Press, December 9, 2009, Los Angeles
Five of US' largest publishers of newspapers and magazines are teaming up to challenge Amazon.com Inc.'s Kindle electronic-book reader with their own technology that would display in color and work on a variety of devices.
Time Inc., News Corp., Conde Nast, Hearst Corp., and Meredith Corp., whose magazines include Time, Cosmopolitan and Better Homes and Gardens, announced a joint venture on Tuesday to develop new ways of presenting publications digitally to rival Kindle's gray "electronic ink" technique.
The publishers' answer to the text-oriented Kindle promises to emphasize visuals, retaining the distinctive look of each publication. It also aims to incorporate videos, games and social networking along with a classic magazine layout that can be flipped through with the touch of a finger.
The new standards the publishers are jointly developing would let consumers read the digital publications on some tablet computers, portable electronic readers and smart phones that render color images.
"The genesis of this idea is to build a fully featured kind of immersive e-reading application that can render our content beautifully on those devices that come to market," said John Squires, the venture's interim managing director.
The Kindle has been available since 2007. Electronic books, newspapers and other publications that Amazon sells for the Kindle will only work with that device.
Companies in the joint venture are hoping to break that lock and sell content starting in 2010 using the new standards. Publishers outside the joint venture would be able to adopt them, too.
News Corp. Chief Executive Rupert Murdoch has made no secret of his dissatisfaction with the Kindle.
News Corp. receives a little more than a third of the $14.99 monthly subscription fee Amazon.com charges for The Wall Street Journal, but it has limited access to subscriber data, Murdoch said last month, describing why the relationship was "not a great deal."
"Kindle is a fantastic invention for reading books. It is not much of an experience for newspapers," he said.
Analysts said the publishers' joint venture to develop their own e-reader technology was a bold attempt to reassert control over their content before becoming prey to terms dictated by Amazon.com, Sony Corp. or Barnes & Noble Inc. on their electronic readers.
But Forrester Research media and technology analyst James McQuivey questioned whether the cost of making rich, interactive features would be worth the revenue it might bring in.
"It takes more time to make that kind of content in an environment where people are paying less," McQuivey said.
Content producers will also struggle to get people to pay for magazines and newspapers because many also offer free versions online. Such publications are unlike books, where the options are limited to digital downloads or paper copies from physical bookstores.
"'Will they pull content offline?' is a big question," said Outsell Inc. analyst Ned May. "It's a prisoner's dilemma. It takes just one person not to, to garner all the traffic and destroy the effort."
Representatives from Amazon.com, Sony and Barnes & Noble did not immediately return messages seeking comment.
The new joint venture would allow partners to set prices for their content. It also has plans to develop new advertising formats that are interactive and target an audience that is more engaged than in print.
The media companies are all equal partners in the venture. The companies said their publications reach 144.6 million people altogether.
Other online stores for digital copies of magazines have emerged, such as Zinio.com, or Time Inc.'s own Maghound.com.
But Squires, an executive vice president at Time Warner Inc.'s magazine unit, said the joint venture seeks to improve upon that experience.
Time Inc., News Corp., Conde Nast, Hearst Corp., and Meredith Corp., whose magazines include Time, Cosmopolitan and Better Homes and Gardens, announced a joint venture on Tuesday to develop new ways of presenting publications digitally to rival Kindle's gray "electronic ink" technique.
The publishers' answer to the text-oriented Kindle promises to emphasize visuals, retaining the distinctive look of each publication. It also aims to incorporate videos, games and social networking along with a classic magazine layout that can be flipped through with the touch of a finger.
The new standards the publishers are jointly developing would let consumers read the digital publications on some tablet computers, portable electronic readers and smart phones that render color images.
"The genesis of this idea is to build a fully featured kind of immersive e-reading application that can render our content beautifully on those devices that come to market," said John Squires, the venture's interim managing director.
The Kindle has been available since 2007. Electronic books, newspapers and other publications that Amazon sells for the Kindle will only work with that device.
Companies in the joint venture are hoping to break that lock and sell content starting in 2010 using the new standards. Publishers outside the joint venture would be able to adopt them, too.
News Corp. Chief Executive Rupert Murdoch has made no secret of his dissatisfaction with the Kindle.
News Corp. receives a little more than a third of the $14.99 monthly subscription fee Amazon.com charges for The Wall Street Journal, but it has limited access to subscriber data, Murdoch said last month, describing why the relationship was "not a great deal."
"Kindle is a fantastic invention for reading books. It is not much of an experience for newspapers," he said.
Analysts said the publishers' joint venture to develop their own e-reader technology was a bold attempt to reassert control over their content before becoming prey to terms dictated by Amazon.com, Sony Corp. or Barnes & Noble Inc. on their electronic readers.
But Forrester Research media and technology analyst James McQuivey questioned whether the cost of making rich, interactive features would be worth the revenue it might bring in.
"It takes more time to make that kind of content in an environment where people are paying less," McQuivey said.
Content producers will also struggle to get people to pay for magazines and newspapers because many also offer free versions online. Such publications are unlike books, where the options are limited to digital downloads or paper copies from physical bookstores.
"'Will they pull content offline?' is a big question," said Outsell Inc. analyst Ned May. "It's a prisoner's dilemma. It takes just one person not to, to garner all the traffic and destroy the effort."
Representatives from Amazon.com, Sony and Barnes & Noble did not immediately return messages seeking comment.
The new joint venture would allow partners to set prices for their content. It also has plans to develop new advertising formats that are interactive and target an audience that is more engaged than in print.
The media companies are all equal partners in the venture. The companies said their publications reach 144.6 million people altogether.
Other online stores for digital copies of magazines have emerged, such as Zinio.com, or Time Inc.'s own Maghound.com.
But Squires, an executive vice president at Time Warner Inc.'s magazine unit, said the joint venture seeks to improve upon that experience.
